Apple Watch bands are insanely profitable: $49 Sport band costs Apple just $2.05 to make

Apple Watch sport pink band back

IHS, a technology research firm, has found that Apple is making huge markups on the bands, with an entry-level 38mm fluroelastomer Sport band which retails for $49 costing an estimated $2.05 to make.

It should be noted the figure excludes other related costs such as packaging, shipping, marketing, cost of sale and so forth and “may not capture the full cost of the material Apple uses to make the band,” IHS analyst Kevin Keller told Reuters.

In a separate analysis, Slice Intelligence, an opt-in service that scans email receipts from a panel of 2 million people representative of online shoppers in the United States, more than 20,000 of whom bought an Apple Watch, has determined that nearly one out of five Apple Watch buyers bought a spare band.

The $49 black Sport band was the #1 choice as both the band bundled with the device and as an extra purchased by consumers, followed by the pricier $149 Milanese loop.

Slice estimated Apple sold 2.79 million Apple Watch units as of mid-June, though that figure is likely higher as Slice’s analysts doesn’t look into non-US markets.

“People are trying to get two watches in one” by pairing a practical sport band with a more luxurious option, said Kanishka Agarwal, Slice’s chief data officer.

I couldn’t agree more.

I bought an entry-level Apple Watch Sport with a white band and am already thinking about getting a $449 stainless steel link bracelet so I can swap out the bands between my workout sessions and business meetings.

Apple has set the stage for a potentially very lucrative market by providing an official way for third-parties to create own ‘Made for Apple Watch’ bands. The company will not share in the revenue from sales of those bands, a person with knowledge of the matter told Reuters.

Which band did you get for your watch?

Source: Reuters