How many are getting an Apple watch?

[ChronoReverse]

So the Watch has a side port that could lead to battery straps. Pretty interesting.

 

[openwheel]

I'm saying that Cook's access, knowledge and motivations make him significantly more trustworthy than an outside analyst group which, by its nature, is limited to making rough guesses based on incomplete data. If you believe that's false, it's up to you to provide hard evidence that the analysts are accurate and that Cook is lying -- the facts we have aren't in your favor. Don't have evidence? Then don't pretend otherwise.

Dude, Tim Cook has every incentive to lie and cheat to gain benefit for his company, his salary, or both. Your argument that only Tim Cook knows the real numbers, but your argument fails completely because you don't know Tim Cook.

Component cost is not rocket science. A half-ass analyst can do the simple addition. It's 1st grade math. It doesn't take an Apple insider to accurately estimate material cost. Like I said, whether the real number is $74, 83, or $112, the number is low as to be expected because we all know Apple makes high profit.

It's only common sense and real World experience. Not some mystique practice as you are implying. No one is saying we have concrete data, not even Tim Cook (a moving target pending logistics/accounting/lead time), but we have good estimate. That's enough to start a conversation other than Tim Cook knows best.

 

[lopri]

How can a first-party ever be a trusted source.. If that were the case we wouldn't have courts. People lie even under oath.

 

[Ramses]

How can a first-party ever be a trusted source.. If that were the case we wouldn't have courts. People lie even under oath.

They aren't, practically ever.

 

[Commodus]

Dude, Tim Cook has every incentive to lie and cheat to gain benefit for his company, his salary, or both. Your argument that only Tim Cook knows the real numbers, but your argument fails completely because you don't know Tim Cook.

Component cost is not rocket science. A half-ass analyst can do the simple addition. It's 1st grade math. It doesn't take an Apple insider to accurately estimate material cost. Like I said, whether the real number is $74, 83, or $112, the number is low as to be expected because we all know Apple makes high profit.

It's only common sense and real World experience. Not some mystique practice as you are implying. No one is saying we have concrete data, not even Tim Cook (a moving target pending logistics/accounting/lead time), but we have good estimate. That's enough to start a conversation other than Tim Cook knows best.

Common sense dictates that a CEO who's beholden to both the law and shareholders has to tell the truth (insofar as he's required to) about margins. Common sense also dictates that a supply analyst group has an incentive to bag customers whenever possible, even if it means basing reports on less-than-complete data. Is it really more trustworthy?

You see what I'm getting at? You try to paint me as an Apple worshipper who takes the words of Saint Cook at face value, but you're doing just the opposite. You're putting an analyst report on a pedestal because it fits into your preconceptions of Apple gouging its customers, facts be damned. I'm only saying that Cook is more reliable because he has access that outsiders don't, and he faces both legal and financial consequences for inaccurate statements that aren't there for an outlet like IHS.

 

[Ramses]

But cook didn't name a figure did he? He didn't really say anything other than a short, "it's not right". Does he name figures to shareholders? I'm honestly asking, I don't know. I'm assuming not or it'd have leaked out.

It may well be a western mindset thing, but if a person trys something, and fails, and another person stands by and says "nah, that's not the way to do that" but does not even try, they are in my book on the lesser side with most credit going to the person that at least tried. This is that sort of situation. Coupled with never trusting someone talking about their own product, it's a deadend.

 

[Commodus]

But cook didn't name a figure did he? He didn't really say anything other than a short, "it's not right". Does he name figures to shareholders? I'm honestly asking, I don't know. I'm assuming not or it'd have leaked out.

It may well be a western mindset thing, but if a person trys something, and fails, and another person stands by and says "nah, that's not the way to do that" but does not even try, they are in my book on the lesser side with most credit going to the person that at least tried. This is that sort of situation. Coupled with never trusting someone talking about their own product, it's a deadend.

He didn't name a figure, but he's also not obligated to say what the profit margins are for specific products. Companies rarely if ever do that, because it's tantamount to giving away trade secrets.

The irony is that Apple has historically been more transparent about figures than most. It's one of the few that says not only how many phones, tablets and computers it ships, but how many weeks' worth of inventory it has. Even Samsung's shipments have to be estimated. And then there's Amazon, which will only ever say that something is the "most gifted" or "most wished for" item on the store, even if its sales are absolutely mediocre.

The main exception to that transparency is the Watch, at present, but it's hard to know whether that's because Apple isn't proud of sales or just doesn't think they're big enough to break out yet. Remember, it folded iPods into the "other" category, but that was still selling well over a million per quarter.

 

[openwheel]

Yes, we get it.

Tim Cook or nothing!!!

 

[WelshBloke]

He didn't name a figure, but he's also not obligated to say what the profit margins are for specific products. Companies rarely if ever do that, because it's tantamount to giving away trade secrets.

No, hes not obligated to give a figure but just going "Nuh huh, nope" isnt proving anyone wrong. The figure in his head could be 50 cents higher than the one hes disagreeing with. Frankly if he wasnt going to give a figure he shouldnt have said anything.

The Apple watch isnt make out of magical, rare electronics available only to Apple. Its pretty much made out of commodity stuff made by a variety of vendors. Theres no trade secret there that every other manufacturer doesnt know about if we are just talking about the price of components.


What is happening is that the low component price is just that, a list of the prices of the physical things in the watch. Mr Cook is probably (and entirely validly) including software costs, marketing costs and R&D. But those are two different things and one doesnt make the other one incorrect.

 

[openwheel]

yeah, now that I think about it, the fact that Tim Cook said anything at all, is almost indication (to me) that $83 is a close enough figure.

 

[WelshBloke]

yeah, now that I think about it, the fact that Tim Cook said anything at all, is almost indication (to me) that $83 is a close enough figure.

Eh? Thats really not what I was getting at.

The $83 dollar amount is just for the bare hardware, yes?

Tim Cook is not going to say that the cost of an Apple product is the cost of materials. He's going to include all those other things as well.

Now they are both valid ways of looking at something but they are very different ways of looking at it. Just because they are different amounts doesnt mean that either of them is wrong.

 

[Oyeve]

So, going from the cheapest aluminium watch to the cheapest steel watch is $200 bucks?

 

[Ramses]

Frankly if he wasnt going to give a figure he shouldnt have said anything.

That would have been the much more respectable and honorable thing to do.

 

[WelshBloke]

That would have been the much more respectable and honorable thing to do.

Well it would have saved us a couple of pages of daft arguments anyway.

 

[WelshBloke]

So, going from the cheapest aluminium watch to the cheapest steel watch is $200 bucks?

And I thought that aluminium was a premium material as well!

 

[ControlD]

And I thought that aluminium was a premium material as well!

Only when you put the extra "i" in it.

 

[touchstone]

The stainless steel version is much, much nicer. But if you aren't looking for a watch-replacement or you just want to try it out the Sport does everything the stainless steel version does.



I have yet to run into somebody else who has one, which is disappointing. That said, I don't live in an area where many people are going to buy an Apple watch.

 

[Commodus]

No, hes not obligated to give a figure but just going "Nuh huh, nope" isnt proving anyone wrong. The figure in his head could be 50 cents higher than the one hes disagreeing with. Frankly if he wasnt going to give a figure he shouldnt have said anything.

I know what you're saying, but the odds are that it's significantly more than what outlets like IHS claim. The point is that the "omg Apple is making a 4x profit on the Watch!" assertions are way off base.

The Apple watch isnt make out of magical, rare electronics available only to Apple. Its pretty much made out of commodity stuff made by a variety of vendors. Theres no trade secret there that every other manufacturer doesnt know about if we are just talking about the price of components.

What is happening is that the low component price is just that, a list of the prices of the physical things in the watch. Mr Cook is probably (and entirely validly) including software costs, marketing costs and R&D. But those are two different things and one doesnt make the other one incorrect.

I certainly wouldn't call them magical, but it's just as wrong to say that it's all off-the-shelf. Apple designed the processor in the S1 chip. It's the only company on the planet using Force Touch, so that's unique. The OLED tech isn't completely new, of course, but it's definitely cut to Apple's specifications. And even things like the aluminum and steel are custom alloys... how do you price that as an analyst?

That's what I'm getting on about. As much as IHS' analysts may want to say "we know how much it costs," they really don't. They can make educated guesses based on the standard parts that exist, and the going rate for material X or Y, but they have no real insight into the highly customized parts... and there are quite a few of those.

 

[Oyeve]

I paid $150 for my gear 2. Bought it used from a coworker who thought his wife would like it. She didnt, so I offered him 150, which is pretty good. I only use it when I actually run or walk for long periods. Otherwise I use a traditional seiko or citizen. But 350 for the smallest cheapest apple watch is pretty steep. Im sure most sales are for the larger watch so 400 minimal. Man, thats kinda hard to swallow.

 

[openwheel]

Some people simply must have the last word. It's in their nature.

"You are not an insider, therefore you don't know $h!# and you never will"

 

[touchstone]

I paid $150 for my gear 2. Bought it used from a coworker who thought his wife would like it. She didnt, so I offered him 150, which is pretty good. I only use it when I actually run or walk for long periods. Otherwise I use a traditional seiko or citizen. But 350 for the smallest cheapest apple watch is pretty steep. Im sure most sales are for the larger watch so 400 minimal. Man, thats kinda hard to swallow.

In feature set the Gear 2 actually holds up very well against the Apple Watch on paper.

 

[openwheel]

Back to topic: Apple Watch

Why would anyone want aluminum construction? There is a good reason real watches don't use aluminum. The minimal weight saving does not justify durability sacrifice. Is it an "Apple Prestige" that they won't use plastic? Look at Casio G-Shock, a real "sports" watch used widely in the military/police force.

 

[WelshBloke]

I certainly wouldn't call them magical, but it's just as wrong to say that it's all off-the-shelf. Apple designed the processor in the S1 chip. It's the only company on the planet using Force Touch, so that's unique. The OLED tech isn't completely new, of course, but it's definitely cut to Apple's specifications. And even things like the aluminum and steel are custom alloys... how do you price that as an analyst?

Not counting R&D? Pretty easily really.

FAB prices for chips are known (or able to be estimated quite accurately), OLED screen prices are well known, unless those alloys are containing something very exotic (and I bet they dont) they will be a standard price as well. I must admit that I don't know much about the hardware side of 'force touch', does it take particular complex hardware?

Honestly the basic hardware is probably fairly easy to cost, it's the 'soft costs' that are difficult to quantify.

 

[Oyeve]

Back to topic: Apple Watch

Why would anyone want aluminum construction? There is a good reason real watches don't use aluminum. The minimal weight saving does not justify durability sacrifice. Is it an "Apple Prestige" that they won't use plastic? Look at Casio G-Shock, a real "sports" watch used widely in the military/police force.

The last time apple used plastic was the 5C. Now they cant give them away.

 

[touchstone]

The last time apple used plastic was the 5C. Now they cant give them away.

Supposedly they will try this again with the '6C'. 100% will be a fiasco when it is announced just like the 5C.