Apple Watch Components Cost £53.11

The cheapest Apple Watch might cost £299 in the shops, but the cost of components is just £53.11, according to an IHS teardown.

IHS said this is a hardware cost to retail price ratio of 23 percent, the lowest of any Apple product it has come across. Typically, Apple devices such as iPhones and iPads range between 29 and 38 percent.

When the cost of manufacturing is taken into account, the cost rises to £54.76, but none of IHS’s figures take into account variables such as logistics, overheads, research and development, IP licensing and other factors.

Teardown

“It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost,” said Kevin Keller, senior principal analyst-materials and cost benchmarking services for IHS. “While retail prices always tend to decrease over time, the ratio for the Apple Watch is lower than what we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated.”

The team said there were no surprises inside the device and all the manufacturers of the components were as expected. Toshiba supplies 8GB of NAND memory, while the DRAM is Micron SDRAM 512MB. Broadcom, STMicro, Maxim, Analog Devices and NXP technology is used for connectivity and interface, while STMicro uses the accelerometer and gyroscope.

“The display is LG’s plastic OLED display and the touchscreen overlay module is a TPK Slim GG utilising their ‘Force Touch’ technology,” Keller said.  “Force Touch was recently incorporated into the latest MacBook and is expected to be found in the next iPhone generation.”

Wireless charging boost

The teardown also revealed that the Apple Watch could be a boost for the wireless charging industry.

The Apple Watch facilitates inductive wireless charging using the company’s MagSafe charging system, but a video on the Internet revealed the charger was capable of powering a Moto 360 smartwatch, which uses the more widely adopted Qi standard. IHS also found the battery in the Apple Watch is easier to replace than those in other Apple devices.

“Apple has not been announced as a member of the WPC or even a supporter of the consortium, so it is unlikely that they have produced a ‘certified’ Qi product,” said Vicky Yussuff, analyst-power supplies & wireless power for HIS. “However, the Qi specification is an open standard meaning it is still possible for Apple to build products which are compatible to the specification. This could be the case with the Apple Watch MagSafe charger.”

“Although it cannot be verified if both the Moto 360 smartwatch and Magsafe wireless charger used in the video were both un-modified ‘off the shelf’ products, this could potentially be another boost for the wireless charging industry looking to increase interoperability.”

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