Dawn Chmielewski, Re/Code:
The teardown of the 38mm Apple Watch Sport shows an estimated bill of materials of $81.20, with the cost rising to $83.70 when the projected manufacturing expense is added. The device’s retail price is $349, implying a gross margin of nearly 76 percent.
I've seen a lot of feather spitting about this in my Twitter feed this morning, why it comes as a surprise to people that Apple — a corporation, existing in a capitalist society — is trying to make as much profit out of one of their products, is baffling to me.
The 76% figure is based on the raw materials only as well, with nothing taken into account for labour, R&D, running machinery... anything! Of course, these things are pretty much impossible to know but Apple has reported the margin to be around the 40% figure during their recent investors conference call.