Apple has raised the bar once more, only this time, the Cupertino tech giant has made advancements concerning its overall markup. The company's first ever wearable, Apple Watch, which has a starting price of $349, costs only $81.20 to make, according to Market Watch. The teardown process was carried out by the IHS research team. However, it should be noted that the total price of making the Apple Watch does not account for the following and therefore, the indirect costs of the product can justify the large price tag.
- Logistics
- Capital expenses
- IP licensing, Software
- SG&A
- R&D
According to the details of the teardown, the newest additions incorporated in to an Apple product were the pulse oximeter, the 'Taptic Engine' feedback machine, a force touch sensor, a modular printed circuit board, and of course the stacked-die integrated circuits. The Taptic Engine is assimilated with a speaker and is responsible for carrying out all the functions concerning vibrations and haptic feedback.
According to the analysts, this particular component consumed a large amount of space in comparison to the other ones, and it is possible that Apple will be researching on reducing its overall size in order to accommodate additional components in its future wearables.
Moving on to the other components, Apple Watch comprises up of 8 GB of NAND flash memory for storage. The flash memory belongs to Toshiba, while the 512 MB of RAM was provided by Micron. The connectivity part was fulfilled by Broadcom while the OLED plastic display was take from LG. For wireless charging, Apple's propriety MagSafe charging technology has been fitted in to the wearable. It appears that Apple will be matching the standards required by the Wireless Power Consortium (WPC) Qi Wireless charging standard, even though the tech giant is not affiliated with the organization in any manner.
While it has been known for quite some time that Apple rakes in substantially large markups in order to increase its profit margins, there are other costs that need to be taken in to account, particularly those that are not directly linked to the manufacturing of the product.
