Menu
Why Apple’s bottom line could do with Apple Watch sales boost

Why Apple’s bottom line could do with Apple Watch sales boost

Much-anticipated Apple Watch has the lowest hardware costs compared to retail price of any Apple phone on the market.

The much-anticipated new Apple Watch has the lowest hardware costs compared to retail price of any Apple phone on the market.

The teardown of the Apple Watch Sport by IHS Technology estimates that the actual hardware costs are only about 24 per cent of the manufacturer’s suggested retail price (MSRP).

According to preliminary estimates by IHS and its Teardown Mobile Handsets Intelligence Service, estimated hardware cost to MSRP ratios for other Apple products reviewed by IHS are in the range of 29 to 38 per cent.

The teardown of the Apple Watch Sport 38 mm shows a bill of materials of $US81.20 with the cost of production rising to $US83.70 when the $US2.50 manufacturing expense is added.

At present, the retail price of the Apple Watch Sport 38 mm is $US349.00 with IHS Technology analysis not including logistics, amortised capital expenses, overhead, SG&A, R&D, software, IP licensing and other variables throughout the supply chain such as the EMS provider.

“It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost,” says Kevin Keller, senior principal analyst-materials and cost benchmarking services, IHS Technology.

“While retail prices always tend to decrease over time, the ratio for the Apple Watch is lower than what we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated.”

New Features and Manufacturing Methods

There are several new features and manufacturing methods used in the Apple Watch Sport, including: a Pulse Oximeter, Force Touch sensor, "Taptic Engine" feedback, encapsulated modular printed circuit board (PCB) assembly and stacked-die integrated circuits (IC).

“While these features have been promoted by Apple and none are necessarily revelatory,” Keller adds.

“It is noteworthy that many features are appearing for the first time – in combination – in one device. It could be a bellwether for other future Apple products.”

For example, the Taptic Engine built into the Apple Watch, and integrated with the loudspeaker, contains a linear actuator which provides haptic feedback and vibrations.

“We found that the device consumes a substantial amount of space inside the watch, and we would expect further miniaturisation of this function in future iterations of the product,” Keller adds.

For Keller, the preliminary results of the teardown do not show any big surprises in the IC content as all of the manufacturers identified so far were expected.

The Apple Watch NAND memory is a Toshiba Flash 8GB and DRAM is a Micron SDRAM 512MB. Broadcom, STMicro, Maxim, Analog Devices and NXP are used for connectivity and interface.

But as Keller points out, one noteworthy change is a shift from Invensense to STMicro for the accelerometer/gyroscope.

“The display is LG’s plastic OLED display and the touchscreen overlay module is a TPK Slim GG utilizing their ‘Force Touch’ technology,” he adds.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Appleiphone 6Apple watchIHS Technology

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments