Latest Slice estimates put U.S. Apple Watch sales at 2.8M as IHS analysis says $49 band costs Apple $2

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Slice Intelligence, which tracks online orders by scanning the email inboxes of more than 2M panel members, estimates that Apple has sold 2.79M Apple Watches in the USA, reports Reuters. The estimate does not include sales in the United Kingdom, Australia, Canada, China, France, Germany, Hong Kong or Japan.

Slice last month reported that around 1.5M U.S. orders were placed on the first day of pre-orders, with sales tailing off rapidly after this. KGI is estimating worldwide sales of 5-6M Watches in Q3, 20-30% down on earlier estimates.

Sales are likely to be boosted by the availability of in-store pickup as of this week, with global sales set to grow significantly following a launch in a second wave of countries later this month. Apple has not released any numbers, simply saying that it was “thrilled” by the popularity of the Watch … 

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Slice said that around 17% of Apple Watch buyers have ordered a second band, the $49 black Sport band the most popular choice, followed by the $149 Milanese Loop. In a separate analysis, Tech research firm IHS suggested that Apple was making huge markups on the bands.

The company claimed that the 38mm version of the Sport band costs Apple just $2.05 to make, while it retails for $49. However, the company acknowledges that this figure does not reflect the true all-in cost of the band.

The estimates do not include expenses such as packaging and shipping and may not capture the full cost of the material Apple uses to make the band, said analyst Kevin Keller of IHS.

Without factoring in all costs, the headline number is pretty meaningless. Tim Cook said during the last earnings call that he has never seen a cost estimate “that is anywhere close to being accurate.” As I noted last month – when the same company estimated that the 38mm Sports watch cost Apple $84 to make – Cook is likely referring to the fact that component and manufacturing cost breakdowns are a small element of the total cost of bringing a product to market. Such headline numbers ignore costs of R&D, operations, packaging, marketing, sales and distribution among many others.

Our own non-scientific poll showed the Sport in Space Gray to be the most popular choice among our readers, with the Sport band also the most popular choice for those who opted for the stainless steel Watch.

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Comments

  1. galley99 - 8 years ago

    The Sport band will show normal wear after just a few days of use, and as such cannot be refurbished. That may also be true for most of the other bands. That may be a factor in the retail price.
    With that being said, if the Sport band were priced at $29 and made available in a wide range of colors, Apple would sell tens of millions.

    • lkrupp215 - 8 years ago

      When are people like you going to get a clue? You have no idea what these bands cost to make and you just pull a price out of your rear end? Thank God you and your ilk are not running Apple.

    • rnc - 8 years ago

      If you don’t want to pay $49, then you have hundreds of options and growing…

      The problem is that they say it costs $2… Right…

      Can you find a comparable band in quality overall for $3? $8? $10? $20? No, you just can find anything that’s as good or better than the band fron Apple…

      Because 50% of what you pay is Marc Newson’s design…

      The other 50%? Well, Apple is greedy, but everyone else is greedy as well… They could do the Apple’s band for $2, but do instead a $1.5, $1, $0.5 bands and sell them for 25X the price too…

    • kadajsouba - 8 years ago

      I find a kind of sad that apple, the biggest company in the world, the most profitable, the most valuable, a leading company in technology, is trying to make massive profit from plastic bands.

      • Why be sad? Apple make more profit and have a greater margin on their products than every single company out there which is precisely why they are the biggest, most profitable, most valuable company.

      • PMZanetti - 8 years ago

        You’d be the same whacko that complains that “Apple is selling cheap $5 bands” if that were the price instead.
        Sad? I want you to realize: THIS is why you work a minimum wage job, and are not someone else’s boss instead. Successful people that run businesses don’t talk like that.

  2. I reserved and bought my 42mm sport yesterday upon availability in my local Apple store in the UK. First time I’ve been in an Apple Store and it was pretty quiet. Thought the bloke who served me was been very rude while messing around on his phone, until I realised that it was actually the point of sale…. very impressive. He told me that they where pretty surprised when they where told they where getting a shipment in.

    • Iven Tenz (@ivenalot) - 8 years ago

      Same here yesterday in the US Store. Needed 3 times my conformation mile and looked around for a # order number to realize how the system actually worked. Until they knew, the person who served me show zero interest. The Watch came from the back, and he took the package out and already wanted me to pay. I wanted to try the model on first, so he said sure, walked over to the demo and he just looked at his phone, didn’t ask anything, zero, but absolutely zero interest as of if I like the size or might want the bigger one.

      I actually went with the 42mm then and asked if they had the same one in that size, he checked and came out with another Watch I just paid and went over to the set up stand and that person was more than welcome. Absolutely nice service from him, but the other guy.. like, such arrogance as if its normal pay several hundred dollars for a watch. Every other jewelry store would assist you to the little detail, to make such a sale.

  3. standardpull - 8 years ago

    There will be cheapo knock-offs on the market. The question will be – should you trust your expensive watch to a no-name brand band, where there is absolutely no recourse should it fail while you’re out fishing on your boat?

    This is much like the iPhone power adapter story – an Apple power adapter costs far less than $2 to make (assuming that design, engineering, factories, and other costs of running a business are free).

    But you can buy an identical-looking knock-off iPhone power adapter for $1. Should you? I don’t know. I definitely have had these knock-offs fail out of the box, or, much worse, put out very wrong voltage. But you can buy 19 of them for the same price as Apple’s.

  4. vandiced - 8 years ago

    I wonder exactly what these people are doing with these things? Besides telling time.

    • Atlas (@Metascover) - 8 years ago

      Quickly answering messages. Measuring physical activity. Checking the weather and calendar.

      • truth42 - 8 years ago

        Is that it?

      • vandiced - 8 years ago

        Really? $400 to do what iPhone can? (Minus perhaps the activity tracking but I have a runkeeer app)

      • truth42:

        Is that it? $400 is well worth it, if you bear in mind that you probably spend £2500 a year ruining your health permanently for a slight nicotine hit :)

    • Torrey Huerta - 8 years ago

      I use mine to tell time, and I love it. I also reply to quick texts, and rarely make a quick phone call. It’s convenient and that $2 band feels super comfortable. I have the green one, and it does not show wear after a month of daily use. I’m quite happy with my purchase.

  5. Mike Hiteshew - 8 years ago

    Anybody who thinks the Sport band is overpriced, OR actually costs $2.00 to make knows very little about watches. Price out a cheap plastic strap made in China for a Seiko diver watch. You’d be hard pressed to find a strap for under $25, and eve then, they are rigid crappy plastic with a plated buckle. The Sport band is incredible quality, and without a doubt the most comfortable plastic/rubber strap I have ever worn. Put ‘Omega’ on the same strap and it’ll cost at least 2X.

  6. Moisés Pinto Muyal - 8 years ago

    I don’t need any expert to tell me total manufacturing costs plus handling and freights.
    My estimated price for Apple’s band is all included, $4.90.
    Not $2.

  7. Moisés Pinto Muyal - 8 years ago

    World Wide sales of Apple’s Watch can reach 10M. Up to 1/2M (Half Million) of solid gold.
    Lets see if I am right or wrong, Time will tell!

  8. Moisés Pinto Muyal - 8 years ago

    You can take this as a rule: *In house cost multiplied by 10 equals retail price less 30% as revenue to retailer.*

  9. Moisés Pinto Muyal - 8 years ago

    As Apple retails directly their products, they add the 30% of retailers to their general profit.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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