Apple Watch Has Lowest Hardware Cost to Price Ratio Yet: IHS

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Apple’s Watch has the lowest ratio of hardware costs to retail price across any Apple product, according to a preliminary estimate by research firm IHS after a teardown study.

The hardware cost of an Apple Watch Sport model was about 24 percent of the suggested retail price compared with 29-38 percent for the iPhone maker’s other products, IHS said on Thursday.

The Apple Watch Sport 38 mm costs $349 (roughly Rs. 21,000) and the teardown shows a bill of materials of $81.20 with the cost of production rising to $83.70 when $2.50 in manufacturing expense is added, IHS said.

Soon after the Apple Watch’s launch on April 24, gadget repair firm iFixit, which has carried out “teardowns” on Apple products from iPhones to MacBooks, said the US company also appeared to be promoting its brand on the watch’s inner workings, complicating detailed analysis of the parts’ origins.

News that a supplier has been chosen – or rejected – for one of Apple’s products can cause drastic swings in stock prices, so huge are the iPhone maker’s orders.

The iFixit team, which travelled from San Luis Obispo to Australia to get its hands on one of the first Apple Watch deliveries after the gadget’s global launch, began by blasting the screen with a heat gun to prise it off.

Then they untangled a nest of cables to uncover the “S1” – the core computing module encased in resin that even a pen knife couldn’t shift.

“We have definitely not seen this before,” iFixit teardown engineer Andrew Goldberg said.

Apple in the past has depended on multiple companies to supply its memory chips for storing music and photos, but imposes strict rules forbidding those suppliers from discussing Apple-related business with investors and the media.

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