“Nearly 20 percent of Apple Watch buyers are not only shelling out hundreds of dollars for the timepiece but are springing for a spare band too, giving the tech giant a profitable second dip into customers’ wallets, according to data provided exclusively to Reuters,” Julia Love reports for Reuters. “The data from Slice Intelligence, a research firm that mines e-mail receipts, offers a rare window into the money-making potential of Apple’s first brand-new product under CEO Tim Cook.”
“The ever-secretive company has yet to release how many units of the watch it has sold, let alone how profitable it is. Slice estimates the company has sold 2.79 million as of mid-June,” Love reports. “Although the entry-level sports band retails for $49, it costs only about $2.05 to make, according to an analysis of the 38-millimeter size by IHS, a technology research firm. The estimates do not include expenses such as packaging and shipping and may not capture the full cost of the material Apple uses to make the band, said analyst Kevin Keller of IHS.”
MacDailyNews Take: “The estimates do not include expenses such as packaging and shipping and may not capture the full cost of the material Apple uses to make the band.” So, 38mm Sport Bands do not cost Apple “only about $2.05” to make.
“Data from Slice, which analyzed only bands made and sold by Apple, showed about 17 percent of shoppers purchased more than one band,” Love reports. “The black sport band is the most popular choice for both the band that comes with device and extras ordered by consumers. Former Apple executive Jean-Louis Gassée, for example, went with the sport model for his starter Apple Watch, reluctant to invest too much in a first-generation product. But he did not skimp on bands, purchasing a black quilted leather loop and a white sport model. He reaches for the leather for business meetings and swaps it out for the rubber model when he heads to the gym.”
MacDailyNews Take: Gassée got that white Sport Band with his Apple Watch Sport. He did not buy it separately.
“Apple has opened the door, creating a platform for third-party developers to design bands of their own. Apple will not share in the revenue from sales of those bands, according to a person with knowledge of the matter,” Love reports. “If bands designed by outsiders take off, that may make a dent in sales of Apple’s own accessories. But having a stylish array of bands to enhance the appeal of the watch is most important, experts say – the extra revenue for Apple is just a fringe benefit.”
Read more in the full article here.
MacDailyNews Take: The sales Slice is seeing is to early adopters (pre-orders mainly).
So, here’s what happened, from personal experience:
The vast majority of early adopters bought Apple Watch Sport units. They wanted one with a Black Sport Band which Apple oh-so-conveniently did not offer among pre-order options. So, like we did, and Jean-Louis Gassée did, 17% ordered an Apple Watch Sport with whatever band they thought they could live with as a backup and then ordered the Black Sport Band (for another $49) to use on the Watch. We went for the first two weeks with White Bands before our Black Sport Bands arrived. Two long weeks; during which we explained to everyone that these bands weren’t our choice and our black bands were coming. The Watches are much more to our liking in silver (7000 series aluminum) and black. Of course, Apple knew this combination would be most popular.
As we wrote back on April 14th, ten days before we got our Apple Watches:
Apple forced the Space Gray Apple Watch Sport with Black Sport Band to be the most popular choice. Just like they forced us to buy our Apple Watch Sport units with White Bands (that we plan to leave in the boxes) and to spend an extra $49 per Watch for the Black Sport Band that the Silver AWS obviously should have been offered with in their canned preorder configs (if Apple were interested in offering a model that would be several times more popular than any other Apple Watch Sport combo). Plus the fact that the “blue,” “green,” and “pink” colors that they did offer with AWS are, in varying degrees, unwearable, ugly, and putrid (not to mention generally too-feminine for a 42mm AWS on a male wrist).
It’s almost as if Apple’s assemblers produced too many Space Gray AWS and/or not enough Silver ones, so they tried to manipulate the preorders by leaving the Black Sport Band out of the choices for the Silver AWS. Or they were trying to grab an extra $49 for Black bands (with us, they succeeded multiple times; regardless, it did guarantee we’d get our Watches on Day One, so it was worth the extra $49 per). Or they were trying to push AWS buyers (many of whom will be transitioning from things like Nike+ FuelBands and are therefore looking for the lightest weight possible) to AW in order to get the silver (Stainless Steel) with Black Sport Band preorder config that they did, for some reason, deign to offer, proving that a Silver Watch with a Black band is not aesthetically offensive to Jony Ive (who may, in fact, given the evidence above, be colorblind). (We’re not decorating nurseries here, Jony. These are watch bands.)
So, how many people chose the Space Gray case just because it was the only AWS preorder config that offered a black band?
Did Apple underestimate the most popular Apple Watch Sport color? – April 14, 2015