Tim Cook told investors on Monday to not even try to guess how much Apple’s supply chain costs are, but that’s not stopping some analysts from trying to determine the cost of Apple Watch components
IHS Technology toredown the 38mm Apple Watch Sport this week, and according to the firm’s estimates, Apple’s $350 timepiece costs less than $85 for all the components.
During the teardown, IHS discovered that Apple Watch may have the lowest hardware costs compare to retail price of any other Apple product. IHS estimates that other Apple products’ hardware cost to MSRP ratio fall within the 29 to 98 percent range, but Apple Watch has a super low 24% ratio.
Those costs don’t account for all the money Apple loses faulty components that come through the supply chain, like the entire batch of Taptic Engines the company paid for from it’s supplier in China. It also doesn’t include the logistics, overhead, R&D, software, IP licensing and other costs associated with bringing the Apple Watch to the market, which surely push it above $100 per unit.
The priciest piece of hardware in the Apple Watch is LG’s tiny OLED display, which IHS estimates costs $20.50. The S1 processor runs around $10.20 per piece, while the 512GB of SRAM adds another $7.20 to the bill. As for the cheapest components, IHS’s experts says the little battery box that had fans so worried is dirt cheap at only 80 cents per battery.
Source: ZDNet
Buster Hein is a freelance writer who lives in Phoenix, Arizona. Twitter: @bst3r.
10 responses to “Apple Watch Sport may cost less than $85 in components”
Everyone knows this, this isnt news. Parts for any technology device are always extremely cheap. We dont pay for the components, we pay for the software and the way those components work together WITH the software and the ecosystem Apple has built.
Actually we paid for how it manufactured, how it dispatched, how it advertised and how it maintained. Design cost is, sadly, only a fraction of the whole business.
I meant consumers choose what to buy based upon the experience they get from the device, and not on wether they think the parts equal what they are paying. But as far as how does the company decides a price then yes, they take into account R&D, advertisement, etc.
As I said, that’s business. And there is nothing wrong or unethical to set the price based on total costs and market demanding. This is how the commercial works. It’s good to see Apple treats stuffs like Apple Watch as a business rather than a faith.
For real… You know how many (yet) designed, cheap robots are sitting in Radio Sha—- nevermind…
But like Fanboy said…
They also don’t consider how much money was spend on research and designing those products.
512MB not GB
I love my moto 360 but the apple watch has really had good reviews so far and developers are jumping on it really fast. Apple is doing really well in how they are deploying software for it. And with this new developers anylitic app things are going to get interesting. Android wear better keep stepping it up. This is great for the whole wearables community overall.
Clearly you’ve never bought a $500+ watch if you are concerned about the cost of the parts.
STUPID headline. the “cost” of the aWatch includes years of RnD. Please stop blogging like you know anything.