News flash: Apple products are expensive, and Apple makes significant revenue every quarter because of it’s thick margins. The high-end version of its upcoming Apple Watch, though, could set a new record in terms of cost.
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Apple (AAPL) is planning on ordering more than 5 million units of the Apple Watch for its initial run in total, according to a Wall Street Journal report Tuesday. Half of those will be the most basic model, which are expected to sell for $350. A third of the initial run will be the as-of-yet unpriced mid-tier model.
As longtime Apple watcher Jon Gruber points out, that leaves around 17% of the the initial production run to be the high-end “Edition” model, which will be cased in 18-karat gold. The Edition model doesn’t have a set price yet, but it’s expected to go for more than the $4,000 Mac Pro, making it among the most expensive Apple products ever.
Gruber notes that 17% of a figure between 5 million and 6 million translates to between 850,000 and 1 million units. If the price comes in at $5,000 per Apple Watch, and Apple sells 1 million per quarter, that means Apple can pencil in $5 billion in revenue on sales of the high-end Watch.
Of course, the price could be even higher, meaning that could be the low end of potential gains from the Edition Watch.
