Apple iWatch costs les than $85 to manufacture (Photo : REUTERS/Robert Galbraith)
The cost to put together the iWatch Sport 38mm variant has been estimated at less than $85 by the research firm IHS Tech.
To be precise, its $83.70 that a single iWatch Sport costs to manufacture, revealed IHS Technology as part of its teardown survey. At the other end, consumers will have to shell out $349 to own the base iWatch variant.
Experts though stated the presumably low manufacturing cost to the retail price ratio - this stands at 24 percent for the iWatch compared to 29 - 38 percent for other Apple products - is typical of first generation devices and tends to come down steadily with the later models, stated CBS News.
As per an earlier report also compiled by IHS, the cost to manufacture the iPhone 6 and iPhone 6 Plus were estimated at $247 and $263 respectively. Compare this to the off contract price each of these command - $749.99 and $849.99 respectively. All the prices mentioned above apply to the 64 GB version of the device.
Interestingly, a similar study of the Samsung Galaxy S6 Edge brings forth a unique scenario - it costs more to manufacture even though Samsung is selling it for a price that's less than the Galaxy S6. This has made many to speculate the long term implications for the South Korean conglomerate of continuing the fight against Apple with devices that cost more to manufacture than corresponding Apple devices.
A similar tear down survey of the Galaxy S6 Edge pegs the costs of putting together the device at $290.45 while it sells for $799.99 for the 64 GB unlocked version.
At this rate, Apple is able to produce 121 iPhone 6 Plus devices for the same costs that it takes Samsung to put together 100 Galaxy S 6 Edge, mentioned Reuters.
However, summing up the total costs of components that goes into the making of a device is just a part of the story as there are a lot of other costs involved. This includes the cost that has gone into all the R&D efforts preceding the launch of the device, licencing of intellectual property rights as well as marketing costs which were not included in the IHS estimate.
