“Lorraine Luk and Daisuke Wakabayashi, reporting today for the WSJ, “Apple Orders More Than 5 Million Watches for Initial Run”: ‘Apple has asked its suppliers in Asia to make a combined five to six million units of its three Apple Watch models during the first quarter ahead of the product’s release in April, according to people familiar with the matter… Half of the first-quarter production order is earmarked for the entry-level Apple Watch Sport model, while the mid-tied Apple Watch is expected to account for one-third of output, one of these people said,'” John Gruber writes for Daring Fireball.
“If Apple actually sells 1 million Edition units per quarter, and they sell for an ASP of $5,000, that’s $5 billion in revenue per quarter — just for the gold Edition models,” Gruber writes. “If the ASP is closer to $10,000, which I still think is possible, double that.”
“3 million Sport units at $350 comes to “only” $1 billion or so. 2 million stainless steel regular units with a $1,000 ASP would be an additional $2 billion,” Gruber writes. “So as a business — if the WSJ’s sources are correct, and if Apple is correctly predicting demand — Apple Watch revenue will be dominated by the gold Edition units, accounting for double or more of the revenue from all the other models combined.”
Read more in the full article -recommended – here.
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]
Related article:
Apple orders more than 5 million Apple Watch units for initial run – February 17, 2015
One million watches per year at $5,000 or $10,000 a watch!! Is that even remotely realistic?
Also, the Sport model STARTS at $350- it might only be for the smaller model. The larger one will probably be more. I think many people will want the larger version and are going to be disappointed at the higher price…
The story said one million per quarter. And the answer is no . . . not for the gold edition.
Not sure they will sell that many high end but what I do see is the watch bands becoming popular and some watches having 2-3 different bands ….. I think the margins will be huge for the Watch!
Good points. Also the cost of the gold edition is high because the raw material “gold”, is expensive. So while revenue may be high the cost to manufacture will be high as well. They’ll still make a higher margin on these though I would guess.
Apple Stores will need a whole new level of security.
If it really costs $5000 for the gold Edition, and I sold 40 shares of AAPL to pay for one, I’d be too afraid to wear it outside the house! 😉
(I thought “Edition” was a dumb model name, but the media referring to it as the “gold Edition Apple Watch” actually works.)
i find it hard to believe that tech-minded apple customers are going to fork over $5k or $10k for a fashion item.
Apple is redefining hi-tech.
1 Apple customers are not tech-minded. That is the whole point. It is why you, and all the other feature-followers, don’t understand this company.
2 $5,000 is peanuts for a high-class watch.
The tech minded Apple customers will likely buy the cheap one first – to check that it does eough for them to want to seriously invest.
In the early release they would be able to sell for almost – if not more – than they paid if it does not suit.
Others may buy the cheap one and upgrade at version 2 because the tech it spawns will cause the original model to become quickly out of date.
5000 USD is outragous for a watch.
But “high-end”-watches are expensive.
Just pay a visit to Geneva or Zurich.
People pay much more for a motor-bike (and then fuel and taxes and insurance).
Based on Apple’s recent history, demand for the Apple Watch will outstrip supply for at least the first six months. After that, Apple will have ramped up production to address the backlog and meet current demand. This is assuming, of course, that the Apple Watch captures consumer mindshare like its other mobile products, which seems like a reasonable assumption given the amount of hype that it has already received in the months leading up to its public release.
I have no doubt that the Apple Watch will sell very well initially, especially compared to its competitors. How sales will trend over the longer term depends on how useful it becomes to people as the Apple Watch app ecosystem develops.
One thing is certain – nearly all of the analysts, especially the professional analysts, will either overestimate or underestimate the Apple Watch market for the next year. In this case, your guess probably is as good as theirs (and possibly much better!).
As Apple reveals new details and custom Apps for the watch, demand will grow
If the software is ready when the hardware is ready, sales will be great.
If the software is not ready, the shit will hit the fan big time.
Check the Rolex prices here:
http://www.alanfurman.com/rolex/
Imagine who can release a new product that is distinctive to all the other items in their product line and get mass 3rd party media advertisement(negative advertisement is still advertisement) and easily make a couple of billion extra dollars added to their quarterly arsenal without really cannibalizing anything and really just adding to their ecosystem. Google just plain can’t do that with all their irons in the fire. I feel a little sorry for Pebble…Hope they can get the low end and and survive.
I will wait for version 2.
1000 for the stainless steel one? I don’t think so. Only fools would pay that much.
Check the Rolex prices here (between 20,000 and 30,000 USD:
http://www.alanfurman.com/rolex/
Those are for 18kt gold watches, not stainless steel.