Apple is earning good revenue from Apple Watch bands, says a report from Reuters. The report reads that around 20% of Apple Watch buyers are spending lavishly not only on the watch but also a spare band as well.
Many buyers going for extra bands
The Cupertino, Calif.-based company has followed the trend of concealing its sales and profits, but Slice Intelligence, a research firm that tracks email receipts, believes that the iPhone maker had sold 2.79 million watch units as of mid-June. However, one can take a short hint of the enormous profits the company is going to earn, provided the band purchase numbers are near that estimate based on each watch buyer purchasing a second band as well.
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Slice released data reflecting the money-making potential of Apple’s first new product category under CEO Tim Cook. For the study, Slice considered email receipts from a group of 2 million people representative of online shoppers in the United States, and of those, 20,000 shoppers bought an Apple Watch. Through the above date, Slice concluded that around 17% of shoppers purchased more than one band. The research firm said that its data is aligned with information from the Dept. of Commerce and sales date from Amazon.
Users pair Apple Watch with outfits
The Apple Watch’s entry-level piece comes with a price tag of $49, but the cost of manufacturing it is just $2.05, according to technology research firm IHS. The cost of manufacturing does not include packaging and shipping and might not even include the full cost of the materials used by Apple to make the band, according to analyst Kevin Keller of IHS. Keller said that with the watch, Apple is trying to pursue a strategy, in which it ships a product for a modest price and then earns an extra profit from selling accessories.
Different types of bands allow users to pair the watch with their apparel and give it a more personalized look, believe experts. As of now, a black sports band is the top choice for both the band that comes with the device and extras ordered by consumers, says the research firm. The second most popular band is the $149 Milanese loop, reflecting how some consumers are matching a sports version with a luxury band in order to give more versatility to the gadget, noted Slice.