A leading technology analyst has estimated that Apple Watch sales in the first two weeks are likely to hit 3M, comprising 1.8M Sport models, 1.2M steel and 40,000 Editions – generating more than $2B revenue. Think Big Analytics principal Carl Howe also estimates that gross margins on the wearable are likely to exceed 60%, making the Apple Watch the company’s most profitable ever product.
[The electronics] in the expensive models are the same ones used in the Sport models, and they just don’t cost that much. And while adding Gold cases and designer bands add cost to the bill of materials, the costs are small compared to the price premiums paid for these products. Unlike in the consumer electronics business, I see no pressure for prices to fall and if anything manufacturing costs will, resulting in a very profitable business.
Howe readily admits that his analysis, like any other from outside the company, are “really just educated guesses,” but he’s a credible name and his reasoning makes sense … Read more