Apple Watch has lowest ratio of hardware cost to retail price

Apple watch launched

According to a research by IHS Technology, the new Apple Watch has the lowest hardware costs compared to retail price of any Apple phone.

The hardware costs are only about 24 percent of the retail price. The teardown of the Apple Watch Sport 38 mm shows a bill of materials of $81.20 with the cost of production rising to $83.70 when the $2.50 manufacturing expense is added.

The selling price of the device is $349, while the build price is only 24 percent of its selling price. However the analysis did not include logistics, amortized capital expenses, overhead, SG&A, R&D, software, IP licensing.

Apple watch launched

There are several new features and manufacturing methods used in the Apple Watch Sport, including: a Pulse Oximeter, Force Touch sensor, “Taptic Engine” feedback, encapsulated modular printed circuit board (PCB) assembly and stacked-die integrated circuits (IC).

The Taptic Engine is integrated with loudspeakers and contains a linear actuator which provides feedback and vibrations.

ABI Research’s TeardownIQ revealed a design centered on a custom Apple Processor (APL 0778) but includes Broadcom (BCM43342), Dialog PMU, NXP (NFC controller), and AMS (NFC booster) connectivity, IDT wireless charger receiver, Elpida RAM, SanDisk / Toshiba Flash memory, STM sensors, and a couple ADI capacitive touch solutions.

The Apple Watch NAND memory is a Toshiba Flash 8GB and DRAM is a Micron SDRAM 512MB. Broadcom, STMicro, Maxim, Analog Devices and NXP are used for connectivity and interface.

Apple Watch features technologies including the Digital Crown, an innovative way to scroll, zoom and navigate without obstructing the display.

The Retina display with Force Touch on Apple Watch senses the difference between a tap and a press, providing a new way to access relevant controls. The Taptic Engine discreetly delivers a gentle tap on your wrist whenever you receive a notification or message.

Apple Watch keeps time to within 50 milliseconds of UTC, the universal time standard. Apple Watch can be personalized with watch faces ranging from traditional analog such as the Chronograph face, to the Modular face, or the Motion face.

Apple Watch Edition features cases specially crafted from custom rose or yellow 18-karat gold alloys developed to be twice as hard as standard gold, a Retina display protected by polished sapphire crystal and a choice of uniquely designed straps and bands with 18-karat gold clasps, buckles or pins.

 

Vishal Kawadkar

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