edition model aside, no, theres no data from which to safely conclude that. that would be higher than their normal margins.
My guess is that their margins are 40% on the sport watch, 50% of the Apple Watch and 75% (at least) on the edition.
Guess for the bands, probably 60-100% depending on the non edition bands.
My guess, they'll sell 70% AWS, 29.5% AW and 0.5% edition
That would mean their average margin would be about 44% on the watches, counting bands, margins I think will be close to 50%.
If I am to guess, might as well put all my numbers down. My guess is 12-15M by the end of the year.
For the product mix, for just the watches, for each million unit sold you got about $480M in revenue and 211M in profits, so for my guess, that's about 6-7.5B in new revenues and 2.5-3.3B in profits (not crazy Iphone profits and revenues... But better than the rest and its just a start).
I assume that what we are seeing here is the brainchild of Angela Ahrendts. This entire Apple Watch rollout campaign is probably her baby. Let employees buy the watch at cost and encourage them to wear them in public. Get the watch on the street and in front of eyes so to speak.
It doesn't matter what Apple's profit margin is on their watch, nor how much Apple employees regularly get as a product discount.
There are two salient facts here; Mr. Cook's email wasn't for employees as much as the general public. He knows the watch sale is a tough one. Why else mention 1000 apps. Think about how many apps that are in your iphone that you don't really use.
Imagine having a huge staff with no one wearing an Apple Watch. It's like having a restaurant and none of the employees eat there. With restricted supply it would be "serve guests first" but the silent polls Apple has been conducting don't bode well. Apple needs to report sales....needs to show acceptance.
Remember: this is an iPhone acessory. A very un-needed and high priced accessory!
My guess is that their margins are 40% on the sport watch, 50% of the Apple Watch and 75% (at least) on the edition.
Guess for the bands, probably 60-100% depending on the non edition bands.
My guess, they'll sell 70% AWS, 29.5% AW and 0.5% edition
That would mean their average margin would be about 44% on the watches, counting bands, margins I think will be close to 50%.
If I am to guess, might as well put all my numbers down. My guess is 12-15M by the end of the year.
For the product mix, for just the watches, for each million unit sold you got about $480M in revenue and 211M in profits, so for my guess, that's about 6-7.5B in new revenues and 2.5-3.3B in profits (not crazy Iphone profits and revenues... But better than the rest and its just a start).
those margins are much higher than their reported normal margin of 30s. what data are you using to base your guesses off of? or are they just blind guesses?
It doesn't matter what Apple's profit margin is on their watch, nor how much Apple employees regularly get as a product discount.
There are two salient facts here; Mr. Cook's email wasn't for employees as much as the general public. He knows the watch sale is a tough one. Why else mention 1000 apps. Think about how many apps that are in your iphone that you don't really use.
Imagine having a huge staff with no one wearing an Apple Watch. It's like having a restaurant and none of the employees eat there. With restricted supply it would be "serve guests first" but the silent polls Apple has been conducting don't bode well. Apple needs to report sales....needs to show acceptance.
Remember: this is an iPhone acessory. A very un-needed and high priced accessory!
what nonsense. selling one device each to some of their employees is not going to move the needle on sales.
please link to these private polls that "don't bode well"...because it sounds an awful like unsubstantiated bullshit you just made up.
it's an accessory today, and that's not a secret -- it's how its marketed. in the future it will naturally take on more autonomy. they already said local apps in the new API out *this year*. dur durr
It doesn't matter what Apple's profit margin is on their watch, nor how much Apple employees regularly get as a product discount.
There are two salient facts here; Mr. Cook's email wasn't for employees as much as the general public. He knows the watch sale is a tough one. Why else mention 1000 apps. Think about how many apps that are in your iphone that you don't really use.
Imagine having a huge staff with no one wearing an Apple Watch. It's like having a restaurant and none of the employees eat there. With restricted supply it would be "serve guests first" but the silent polls Apple has been conducting don't bode well. Apple needs to report sales....needs to show acceptance.
Remember: this is an iPhone acessory. A very un-needed and high priced accessory!
What incredible, valuable insight. Quite a scholar you are.
Buy yeah, you're right. The Apple Watch is a tough sell. Here are a few internet comments I read online that Illustrate this, as an example:
Quote:
Apparently none of you guys realize how bad of an idea a touch-screen is on a phone. I foresee some pretty obvious and pretty major problems here.I’ll be keeping my Samsung A707, thanks. It’s smaller, it’s got a protected screen, and it’s got proper buttons. And it’s got all the same features otherwise. (Oh, but it doesn’t run a bloatware OS that was never designed for a phone.) Color me massively disappointed.
For those wondering about this incredible Samsung a707:
Touch screen buttons? BAD idea. This thing will never work.
Quote:
Yay, the widescreen Video iPod is here….But, yea, a touchscreen? And, whats the battery life on that thing? Huge 3.5 inch display = no room for batteries = not good for battery life.
Quote:
I’m not impressed with the iPhone. As a PDA user and a Windows Mobile user, this thing has nothing on my phone. It sure is good at what it was designed for, a phone that entertains and talks… other than that, I dont see much potential. How the hell am I suppose to put appointments on the phone with no stylus or keyboard?! I can sync it with my computer, but when Im on the go, I cant do either!
Quote:
It took Apple how long to develop this ONE PHONE, Samsung and Motorola release new phones every few months lol, and constantly innovates and gets better. I’m sorry but if I’m sending text messages I’d rather have my thumb keyboard than some weird finger tapping on a screen crap.
Oh sorry, wrong product. Just goes to show that extreme short-sightedness, lack of imagination, knee-jerk negativity, and trolling is nothing new. In fact, it's par the course for every single Apple product in existence. Now, to bash the Apple Watch people are revising history to pretend that the iPhone was universally praised and celebrated at its unveiling. I remember well that it couldn't be further from the truth. Most internet threads were more than 50% negative on the product. I put the same credibility in the current wave of shitty, predictable negativity and mockery from the internet about the Apple Watch.
those margins are much higher than their reported normal margin of 30s. what data are you using to base your guesses off of? or are they just blind guesses?
I'm pretty sure that Apple's margins are much higher than 30% on most accessories - and the watch is considered to be an accessory. I wouldn't be surprised if the margins on the Apple watch are more than 70% - especially once you include the band.
I assume that what we are seeing here is the brainchild of Angela Ahrendts. This entire Apple Watch rollout campaign is probably her baby. Let employees buy the watch at cost and encourage them to wear them in public. Get the watch on the street and in front of eyes so to speak.
Exactly. Simply brilliant guerrilla marketing for a product that many do not yet understand and will not otherwise go out of their way to see. Who better than an enthusiastic Apple employee to extol and show off the product's virtues in locations far beyond the watch's retail venues? It's not a nerd product. It has a coolness factor that should attract interest at the gym, college campuses, bars, dance clubs and music events. It's a street marketing strategy aimed at young, single and affluent trendsetters.
Everyone person I've talked with, from friends to Apple Store employees, say they're happy using just their iPhones, and are passing on the Apple Watch. I'm wondering if this is a device that Apple and other companies are much more excited about then the consumer.
I'm pretty sure that Apple's margins are much higher than 30% on most accessories - and the watch is considered to be an accessory. I wouldn't be surprised if the margins on the Apple watch are more than 70% - especially once you include the band.
I think you are wrong. The margins are likely between 35 and 40 percent, which is typical for many Apple products. Accessories are things like cables and cases, not a watch that is very expensive to make.
Keep in mind cost includes research, marketing, and warranty related costs as well as salaries. The margins are probably better for the more expensive models. The margins may improve overtime.
The Apple Watch is a very visible product - it's never in your bag or pocket. It makes sense to encourage as many Apple employees as possible. It's great advertising.
I think you are wrong. The margins are likely between 35 and 40 percent, which is typical for many Apple products. Accessories are things like cables and cases, not a watch that is very expensive to make.
Keep in mind cost includes research, marketing, and warranty related costs as well as salaries. The margins are probably better for the more expensive models. The margins may improve overtime.
Obviously, Apple has fixed costs--research, engineering, marketing, factory construction, and such like. Salaries, wages, raw materials, transportation, warranty costs, etc. are variable costs. As there has been no ?Watch repaired or replaced on warranty, only fixed costs associated with AppleCare come into play.
Apple has spent--perhaps invested is a better word--lavishly on the fixed costs. It has reinvented parts of the watch that we didn't think needed reinvention. Everything that we have been told about the ?Watch leads me to believe that it is the most rigorously engineered device in Apple's history. Having said all this, it is difficult to see how the margins on the ?Watch can be anything less than enormous.
The notion that the ?Watch is expensive to make is fantasy. The Sport may have the finest aluminum cases of any device ever sold. However, it is still aluminum with the cost structure of aluminum, not gold or platinum. The stainless steel Watch is stainless steel. It cannot cost significantly more to manufacture than the aluminum Sport, but Apple charges substantially more for it. Even the Edition is priced about an order of magnitude more than the cost of its gold content.
The electronics in each model are identical irrespective of the price of the Watch. It is difficult to see how the electronics can cost more than $50. I estimate the electronics cost much less than $50.
Margins of 35%-40% are gross underestimates. I see no realistic scenario in which margins on the Watch are not closer to 350%-400%--if not higher.
The Apple Watch is a very visible product - it's never in your bag or pocket. It makes sense to encourage as many Apple employees as possible. It's great advertising.
On the other hand ... If enough employees are wearing them in the store, the net effect may be a kind of uniformity, like going to a club where everyone is wearing the same wristband. Just looking around the Apple Store, a customer might see a dozen employees in blue shirts with black and silver squares strapped to their wrists (you're not going to see any gold on an employee). Imagine 3 or 4 standing together in complete uniformity, right down to the computer on their wrist. The wrist band will be the deciding factor -- will that be enough variety and personalization for the fashion conscious consumer? Unfortunately, given the cost of the ?Watch even at a 50% discount, you're likely going to see a lot of sport bands on employees, further reinforcing the homogeny. Then again, most people who go into the ?Store are probably doing so for the cool stylish technology and not necessarily looking at the ?Watch as an expression of an individual fashion statement. And I don't know how big an issue this will be for customers at large -- personally, while I have bought watches as an individual expression of my style, I wouldn't think twice about having the same watch on my wrist as my co-workers if I wanted the functionality it offers.
On the other hand ... If enough employees are wearing them in the store, the net effect may be a kind of uniformity, like going to a club where everyone is wearing the same wristband. Just looking around the Apple Store, a customer might see a dozen employees in blue shirts with black and silver squares strapped to their wrists (you're not going to see any gold on an employee). Imagine 3 or 4 standing together in complete uniformity, right down to the computer on their wrist. The wrist band will be the deciding factor -- will that be enough variety and personalization for the fashion conscious consumer? Unfortunately, given the cost of the ?Watch even at a 50% discount, you're likely going to see a lot of sport bands on employees, further reinforcing the homogeny. Then again, most people who go into the ?Store are probably doing so for the cool stylish technology and not necessarily looking at the ?Watch as an expression of an individual fashion statement. And I don't know how big an issue this will be for customers at large -- personally, while I have bought watches as an individual expression of my style, I wouldn't think twice about having the same watch on my wrist as my co-workers if I wanted the functionality it offers.
If they sell enough, with the same bands, that you see many wearing them, then they have an Iphone level success on their hands and I'm pretty sure they'll offer slightly more variances in the color of the watch itself by then.
those margins are much higher than their reported normal margin of 30s. what data are you using to base your guesses off of? or are they just blind guesses?
Margins on Iphone 6 as a whole are close to 40%, so how on earth is me saying 40% for the Sport Watch is out there. In fact, it maybe even more than that. My guesses are certainly in the ballpark of the real numbers. I don't have Apple's whole cost structure so I can't do a whole cost analysis and then pricing.
If they sell enough, with the same bands, that you see many wearing them, then they have an Iphone level success on their hands and I'm pretty sure they'll offer slightly more variances in the color of the watch itself by then.
People are also not likely to be looking at the ?Watch the same way in the store as they will at work, or at a party, so in as much as this is even an issue, it's not likely to be a big one around the Apple store -- people will just want to see an ?Watch wherever they can get their hands on one, including the nearest helpful employee.
But yes, the rumors already have them coming out with new case materials by December. So that's a no brainer, as well as different shapes. Right now it's just square, and silver (let's face it, people are going to see very few gold watches in the wild), and everyone's will look the same unactivated.
Comments
I guess they're not worried about selling out supply any time soon.
I'm pretty sure their "supply" exceeds 70K watches by a factor of at least 70, so not worried.
edition model aside, no, theres no data from which to safely conclude that. that would be higher than their normal margins.
My guess is that their margins are 40% on the sport watch, 50% of the Apple Watch and 75% (at least) on the edition.
Guess for the bands, probably 60-100% depending on the non edition bands.
My guess, they'll sell 70% AWS, 29.5% AW and 0.5% edition
That would mean their average margin would be about 44% on the watches, counting bands, margins I think will be close to 50%.
If I am to guess, might as well put all my numbers down. My guess is 12-15M by the end of the year.
For the product mix, for just the watches, for each million unit sold you got about $480M in revenue and 211M in profits, so for my guess, that's about 6-7.5B in new revenues and 2.5-3.3B in profits (not crazy Iphone profits and revenues... But better than the rest and its just a start).
I assume that what we are seeing here is the brainchild of Angela Ahrendts. This entire Apple Watch rollout campaign is probably her baby. Let employees buy the watch at cost and encourage them to wear them in public. Get the watch on the street and in front of eyes so to speak.
There are two salient facts here; Mr. Cook's email wasn't for employees as much as the general public. He knows the watch sale is a tough one. Why else mention 1000 apps. Think about how many apps that are in your iphone that you don't really use.
Imagine having a huge staff with no one wearing an Apple Watch. It's like having a restaurant and none of the employees eat there. With restricted supply it would be "serve guests first" but the silent polls Apple has been conducting don't bode well. Apple needs to report sales....needs to show acceptance.
Remember: this is an iPhone acessory. A very un-needed and high priced accessory!
those margins are much higher than their reported normal margin of 30s. what data are you using to base your guesses off of? or are they just blind guesses?
what nonsense. selling one device each to some of their employees is not going to move the needle on sales.
please link to these private polls that "don't bode well"...because it sounds an awful like unsubstantiated bullshit you just made up.
it's an accessory today, and that's not a secret -- it's how its marketed. in the future it will naturally take on more autonomy. they already said local apps in the new API out *this year*. dur durr
It doesn't matter what Apple's profit margin is on their watch, nor how much Apple employees regularly get as a product discount.
There are two salient facts here; Mr. Cook's email wasn't for employees as much as the general public. He knows the watch sale is a tough one. Why else mention 1000 apps. Think about how many apps that are in your iphone that you don't really use.
Imagine having a huge staff with no one wearing an Apple Watch. It's like having a restaurant and none of the employees eat there. With restricted supply it would be "serve guests first" but the silent polls Apple has been conducting don't bode well. Apple needs to report sales....needs to show acceptance.
Remember: this is an iPhone acessory. A very un-needed and high priced accessory!
What incredible, valuable insight. Quite a scholar you are.
Buy yeah, you're right. The Apple Watch is a tough sell. Here are a few internet comments I read online that Illustrate this, as an example:
For those wondering about this incredible Samsung a707:
http://s12.postimg.org/xgd4xos31/samsung_a707_red.jpg
Yay, the widescreen Video iPod is here….But, yea, a touchscreen? And, whats the battery life on that thing? Huge 3.5 inch display = no room for batteries = not good for battery life.
Oh sorry, wrong product. Just goes to show that extreme short-sightedness, lack of imagination, knee-jerk negativity, and trolling is nothing new. In fact, it's par the course for every single Apple product in existence. Now, to bash the Apple Watch people are revising history to pretend that the iPhone was universally praised and celebrated at its unveiling. I remember well that it couldn't be further from the truth. Most internet threads were more than 50% negative on the product. I put the same credibility in the current wave of shitty, predictable negativity and mockery from the internet about the Apple Watch.
I'm pretty sure that Apple's margins are much higher than 30% on most accessories - and the watch is considered to be an accessory. I wouldn't be surprised if the margins on the Apple watch are more than 70% - especially once you include the band.
Everyone person I've talked with, from friends to Apple Store employees, say they're happy using just their iPhones, and are passing on the Apple Watch. I'm wondering if this is a device that Apple and other companies are much more excited about then the consumer.
We'll find out soon enough.
I think you are wrong. The margins are likely between 35 and 40 percent, which is typical for many Apple products. Accessories are things like cables and cases, not a watch that is very expensive to make.
Keep in mind cost includes research, marketing, and warranty related costs as well as salaries. The margins are probably better for the more expensive models. The margins may improve overtime.
The Apple Watch is a very visible product - it's never in your bag or pocket. It makes sense to encourage as many Apple employees as possible. It's great advertising.
Apple has spent--perhaps invested is a better word--lavishly on the fixed costs. It has reinvented parts of the watch that we didn't think needed reinvention. Everything that we have been told about the ?Watch leads me to believe that it is the most rigorously engineered device in Apple's history. Having said all this, it is difficult to see how the margins on the ?Watch can be anything less than enormous.
The notion that the ?Watch is expensive to make is fantasy. The Sport may have the finest aluminum cases of any device ever sold. However, it is still aluminum with the cost structure of aluminum, not gold or platinum. The stainless steel Watch is stainless steel. It cannot cost significantly more to manufacture than the aluminum Sport, but Apple charges substantially more for it. Even the Edition is priced about an order of magnitude more than the cost of its gold content.
The electronics in each model are identical irrespective of the price of the Watch. It is difficult to see how the electronics can cost more than $50. I estimate the electronics cost much less than $50.
Margins of 35%-40% are gross underestimates. I see no realistic scenario in which margins on the Watch are not closer to 350%-400%--if not higher.
Would be nice to have them delivered for employee use the day before so that launch day, they will all be wearing them.
On the other hand ... If enough employees are wearing them in the store, the net effect may be a kind of uniformity, like going to a club where everyone is wearing the same wristband. Just looking around the Apple Store, a customer might see a dozen employees in blue shirts with black and silver squares strapped to their wrists (you're not going to see any gold on an employee). Imagine 3 or 4 standing together in complete uniformity, right down to the computer on their wrist. The wrist band will be the deciding factor -- will that be enough variety and personalization for the fashion conscious consumer? Unfortunately, given the cost of the ?Watch even at a 50% discount, you're likely going to see a lot of sport bands on employees, further reinforcing the homogeny. Then again, most people who go into the ?Store are probably doing so for the cool stylish technology and not necessarily looking at the ?Watch as an expression of an individual fashion statement. And I don't know how big an issue this will be for customers at large -- personally, while I have bought watches as an individual expression of my style, I wouldn't think twice about having the same watch on my wrist as my co-workers if I wanted the functionality it offers.
If they sell enough, with the same bands, that you see many wearing them, then they have an Iphone level success on their hands and I'm pretty sure they'll offer slightly more variances in the color of the watch itself by then.
those margins are much higher than their reported normal margin of 30s. what data are you using to base your guesses off of? or are they just blind guesses?
Margins on Iphone 6 as a whole are close to 40%, so how on earth is me saying 40% for the Sport Watch is out there. In fact, it maybe even more than that. My guesses are certainly in the ballpark of the real numbers. I don't have Apple's whole cost structure so I can't do a whole cost analysis and then pricing.
It only means that select ones are.
Originally Posted by foggyhill
If they sell enough, with the same bands, that you see many wearing them, then they have an Iphone level success on their hands and I'm pretty sure they'll offer slightly more variances in the color of the watch itself by then.
People are also not likely to be looking at the ?Watch the same way in the store as they will at work, or at a party, so in as much as this is even an issue, it's not likely to be a big one around the Apple store -- people will just want to see an ?Watch wherever they can get their hands on one, including the nearest helpful employee.
But yes, the rumors already have them coming out with new case materials by December. So that's a no brainer, as well as different shapes. Right now it's just square, and silver (let's face it, people are going to see very few gold watches in the wild), and everyone's will look the same unactivated.