“Since Edition watches are so much more expensive than the others, even in low relative numbers, they will drive revenue.,” J. M. Manness writes for Seeking Alpha. “At just 1% of unit sales, they provide 23% of revenues. A mere 4% drives over half, and 16% drives a whopping 85% of revenues… Uber-Pessimistic with only 0.1% edition sales, the collection still accounted for 3% of revenue.”
“But the Edition watches have some expenses that the others do not, and these need to be addressed. These are the Cost of Sale (COS) expenses,” Manness writes. “It’s not that the others do not have them, only that they are so much higher for the Edition watches.”
Manness writes, “Apple will have very high margins on the Apple Watch Edition collection, probably in the 65% – 70% range.”
How Manness arrived at this range can be found in the full article – recommended – here.
MacDailyNews Take: We can thank Apple Watch Edition buyers for helping to keep the prices low for Apple Watch and Apple Watch Sport.
[Thanks to MacDailyNews Reader “OldFatGuy” for the heads up.]