As per Business Analyst, Apple Watch shall be the most profitable product that Apple has rolled out. The analyst has concluded theories for Apple Watch. The launch of Apple Watch was slow and long. The sales of the product have been excellent in the first few hours. As per the market research millions were sold in just few hours. China has even sold gold Apple Watch in less than an hour.
The analytic model also suggests that while the sports edition of Apple Watch shall lead sales in volume, which will result in selling 1.8 million units before May 8. Thus Apple can see revenue increase due to this Watch in that period, there would be $900 million that would be generated due to this product. Apple has designed its product in such a way that it leads to revenue generation in shorter span of time. Its main target is not to degrade its 40% average gross margins.
The analyst believes that the Apple Watch product line will the most profitable product for Apple, with the gross margins exceeding 60 percent. Let us see why. This is because the core electronics modules and components that have been used in the expensive models are the same ones that have been used in the Sport models, and they are not very expensive. This shows that the components for both these models just don’t cost that much.
The Business Analyst also believes that the roll-out and the launch of the watches weren’t really botched, but that Apple had intentionally given a significant delay between the order and delivery, in order to test the market. They believe that the watch is sitting in the store and warehouse and are consuming the margins. Thus Apple has made a smart plan in launching the different models of Apple Watch.
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