Six Colors
Six Colors

by Jason Snell & Dan Moren

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No, the Apple Watch doesn’t cost $84 to make

A couple of weeks ago, Tim Cook said this to analysts:

Generally there’s cost breakdowns that come out around our products that are much different than the reality. I’ve never seen one that is anywhere close to being accurate. And so if that’s the basis of your comment, I’d really dig on the data if I were you.

Here’s who Cook was talking about: IHS claims the Apple Watch costs $84, while TechInsights says it’s more like $139.

Now here’s Hristo Daniel Ushev with the analysis:

From my experience working with product and cost experts at a well-known mobile device company, I can tell you: Apple Watch does not cost $84 in hardware and manufacturing. It costs meaningfully more.

Ushev’s explanation is worth a read if you’ve ever wondered why these cost estimates are so far off base.

[via Charles Arthur]

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