A trust-worthy Apple analyst has estimated that the Apple Watch sales within the first two weeks has hit a total of 3 million across the three models. Broken down that would be 1.8 million sport models, 1.2 million collection models, and 40,000 edition models, which adds up to 2 billion dollars in revenue. Carl Howe from Think Big Analytics predicts that Apple’s gross margins are around 60%, making this Apple’s most profitable product yet.
[The electronics] in the expensive models are the same ones used in the Sport models, and they just don’t cost that much. And while adding Gold cases and designer bands add cost to the bill of materials, the costs are small compared to the price premiums paid for these products. Unlike in the consumer electronics business, I see no pressure for prices to fall and if anything manufacturing costs will, resulting in a very profitable business.
Howe admits that his analysis are “really just educated guesses”, just like any information from outside the company. If predictions are correct, the Edition model will be responsible for a small piece of sales but will make up a quarter of total Watch revenue.
He predicts the next generation Apple Watch will be a minor one — “simply a software update…with additional bands and possibly another case color” — which makes sense. Apple’s iPhone lineup typically has an “S” upgrade between each model. Though, we should also be expecting a hardware bump. It wouldn’t make much sense to just update the bands and casing.