The average sales price of the Apple Watch could be much more than people believe, according to analysts at Piper Jaffray. Right now it’s widely believed that the entry-level timepiece, the “Apple Watch Sport,” will cost about £225 ($US349).
But Piper Jaffray believes average selling prices (ASPs) will be higher when factoring in extras such as bands and storage cases.
These add-ons mean that instead of the £3.25 billion in sales for the first run previously estimated, Apple could stand to make in excess of £4 billion in revenues on early watch sales, Piper Jaffray says.
Watches need maintenance, people go for different bands, and buyers want alternative cases. Just as consumers go for iPhone cases to keep them safe, Piper Jaffray thinks it’s likely that add-ons will raise the price of Apple’s latest tech.
Piper Jaffray expects the mid-range model will not be £325 ($US500) as previously thought, but closer to £400. The luxury item, the Edition, could have an ASP of more than £4,800 ($US7,500) — much higher than the previously forecasted £3,250 ($US4,999). Some people have said they believe the gold Apple watch may sell for as high as $US10,000.
When considering the Sport model specifically: “We believe that the interchangeable bands on the Apple Watch are a key feature that Apple will promote heavily. Based on pricing of the Apple-made silicon cases for iPhone 6 at $US35, we believe that the company’s Apple Watch Sport elastomer bands are likely to start in the same range ($US29-39),” Piper Jaffray explains. And when looking at the higher-end watches, steel bands for the Apple Watch and silver/gold styles for the Edition will be even more expensive.
In January, BI Intelligence compiled the range of estimates for shipments for 2015. Analysts are really varied and Piper Jaffray was at the bottom end in terms of estimated output.
One way to begin to gauge quite how much more is to take John Gruber’s estimation of sales of the gold Apple Watch. The Wall Street Journal reports that there’ll be an initial 5 million run of Apple Watches once they go on sale this year. Sales are broken down into: 2.5 million Apple Watch Sports; 1.6 million middle-ground silver watches; and 900,000 luxury gold Edition watches.
With the latter expected before to retail at around £3,250, Apple would make £3.25 billion a quarter in revenue from that device alone. But, as noted above, it’s much more when using Piper Jaffray’s numbers: 900,000 sales with the new price point of £4,800 would mean a revenue of about £4.3 billion.
Nobody knows exactly how many will go on sale, precisely when, or for how much. But the company is expected to reveal more at its March 9 product event.
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