IHS estimates that the components of the Apple Watch (Sport edition) are $81.20 (New Apple Watch Has Lowest Ratio of Hardware Costs to Retail Price, IHS Teardown Reveals). The total cost of the product is estimated at $83.70, including production. The value was arrived at after a teardown, which valued the flexible OLED display – the most expensive component – at $20.50.
Analyst Comment
Apple’s CFO, Luca Maestri, told investors that the margin on the Watch is lower than the company’s 40% average. This does not correlate with the cost breakdown, unless there’s a lot of unrecognised cost going into these. (NH)
