Apple Watch appears to have gotten off to a very successful start since making its debut in April — and it’s not just the device itself that’s making Apple a lot of money. The company is also thought to be fetching big profits from band sales, with almost 20 percent of Watch buyers opting for a second strap.
Apple hasn’t revealed how many Watches it has sold yet, but data from Slice Intelligence, a research firm that analyzes email receipts, indicates that around 2.79 million units have been snapped up as of mid-June. But the Watch itself is only the beginning of another big money maker for Apple.
Slice also estimates that 17 percent of Watch buyers are picking up a second strap when they buy their new wearable, and by far the most popular one is the Sport band. At $49, it has a staggering profit margin, given that it costs just $2.05 to produce, according to research firm IHS.That cost doesn’t include packaging and shipping, and the actual price of materials could be a little more, said IHS analyst Kevin Keller. But even if those things brought the cost up to as much as $9 a unit, Apple is still making $40 on every Sport band sold.
In some ways, Apple Watch is like the razor, Keller says. The device itself is sold at a somewhat reasonable cost, but then the accessories that go with it — in this case the bands and charging cables — are where the big profits are made.
Slice found the $149 Milanese Loop to be the second-most popular spare band Watch buyers select, which suggests many are pairing a Sport band with a more formal option to make the device more versatile.
“People are trying to get two watches in one,” Kanishka Agarwal, Slice’s chief data officer, told Reuters.
The popularity of bands could be making the Watch a more expensive purchase than most customers originally intended. Like the Milanese Loop, the quilted Leather Loop is priced at $149, while the high-end stainless steel Link Bracelet is $449 — $100 more than the entry-level Watch Sport.
But Apple will likely see sales of its own bands dropping as third-party Watch accessories flood the market. Many are already available, and the options have been growing exponentially in recent weeks.
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