Apple is charging quite the premium for its smartwatch at $350 for the base model. This is a lot higher than other smart watches on the market today, but why? Is it because the Apple Watch components cost more? That would make sense and mean that Apple needs to charge more just so they can turn a profit.
However, that does not seem to be the case, because according to a report from IHS Technology, the Apple Watch’s components cost a total of $81.20. Even with an extra $2.50 for manufacturing costs, that brings the total to only $83.70.
IHS says that this makes the Apple Watch the item with the highest markup among Apple’s products so far. The most expensive component is said to be the display which costs $20.50 for the Ion-X version. We don’t know how much the sapphire or Edition bodies cost. We also don’t know how accurate IHS’ estimates are, so keep that in mind.
Apple might get cheaper components because of the amount of orders they place, so that would help to keep their cost down quite a bit. There are also other factors to take into consideration, like the hours put into manufacturing the product where salaries needs to be paid for instance. If we get confirmation on these figures we will let you know.
Image Credit iFixit
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