The Apple Watch Edition could see a mark-up of nearly 500 percent

Apple Watch Edition

Yesterday, Apple detailed the Apple Watch, the Watch Sport and the Watch Edition, even going as far to break down how each is made and why each model is so different from the other.

The company also unveiled the pricing for each variant of the Watch, with the highest of the three, the Watch Edition, starting at $10,000 and going as high as $17,000. The high price tag is not that big of a surprise, considering Apple has been positioning the Watch Edition (and the Watch and Watch Sport, even) as fashion accessories that offer pieces of technology, and not merely just another smartwatch. However, Apple’s all about profit, and Business Insider has put together just how much profit the Watch Edition could be bringing in for Apple.

The breakdown of the numbers looks at a lot of different variables, including the gold that Apple includes with the Watch Edition, the overall cost of production, and the Watch itself. More than that, though, the report weighs in on just how much gold Apple will be using within the Watch Edition, which is about 55 grams, apparently. With all of that put together, BI assumes that the Watch Edition probably costs Apple $2,200.

That means Apple’s netting about $7,800, or a mark-up around 354%.

However, there may actually be some reasons why that’s too low of an estimate, as the original report cites Forbes, when it states that Apple might be using a lower amount of gold in the Watch Edition, which would inevitably make the mark-up even higher as it would mean less money Apple is putting out in gold for the Edition. If that is the case, it would mean that Apple could be seeing a mark-up of 500 percent.

Morgan Stanley’s analyst breaks it down as such:

If Apple achieves 1% penetration of the 30m-unit a year Swiss luxury watch market with the high-end gold collection, and the rest of the Watch units are split between the entry and mid-range collections, Appleā€™s Watch ASP in the first 12 months would be $618, or 37% higher than our $450 estimate.

There’s never been any doubt that Apple is making a profit off the Watch, the Watch Sport or the Watch Edition, but with analysts expecting that the mark-up could be that much, even if Apple is selling the Watch Edition in limited quantities there’s still quite a bit of money for the Cupertino-based company to make.

[via Business Insider; Forbes]