How much actual gold is in the Apple Watch?

Discussion in 'Apple Watch Talk' started by iDan, Mar 11, 2015.

  1. iDan

    iDan Administrator Staff Member

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    Has anyone seen an article that talks about how much actual gold is used in the Apple Watch?

    I'm just curious out of $10,000, how much is due to the price of gold?
     
  2. 4Nines

    4Nines Member

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    That's a good question! I would be more interested in the Gold version if I knew that it actually contained several ounces of Gold. Do we know how much the watch weighs? Maybe we could work backwards if we have the actual product weight?
     
  3. twerppoet

    twerppoet Well-Known Member

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    Even if the watch were solid 24 carat gold, it wouldn't be anywhere near $10,000 worth. That's not how the luxury market works. A $10,000 dollar hand bag (they do exist) is not made out of $6000 worth of leather (or other materials).

    Lets say the Apple Watch weights 2 oz. That's on the heavy side for a watch. The current price of gold is about $1200 per ounce. As you can see that doesn't come even close to accounting for a $10,000 price tag.

    At any rate, as several blogs have been pointing out, the people likely to buy a $10,000 Apple Watch are the same people who spend that kind of money on other short term items; world cruises, first class plain tickets, maintenance on their Ferrari, etc. When you or I think of spending that kind of money on something we're thinking long term investment. The people the Apple Watch Edition watch is meant for won't even consider whether it's still going to be useful a year, or two years down the road.

    The longevity argument is us trying to apply our life style values to a completely different economic class. Heck, some of them probably have higher monthly maintenance bills for their houses.
     
    Last edited: Mar 12, 2015
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  4. Jeffrey

    Jeffrey Member

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    Forbes notes that the actual gold content of the watch is lower than standard 18-karat gold, and estimates that there's as little as $640 of gold in the model. That's because it's a metal matrix composite that Apple has patented: You can find out exactly what it's made of here.


    • 55 grams of 18-karat gold: As of today, the spot price of 18-karat gold means this would set you back about $1,550.
    • The Watch itself. It costs about $549 for the watch with a white sport band (the $10,000 gold model also comes with the white band).
    • Cost of production. This part is hard to say, but remember that the cost of producing the ordinary watch (and some profit) are included in the $549 watch. There may be some extra costs to the gold element, but given the scale of production, they don't seem likely to be a big part of the cost.
    If you add the cost of 55 grams of 18-karat gold to the cost of the watch, plus say $100 per unit (which seems quite liberal) for other production costs, you get to about $2,200. The cost of shipping it, marketing it and selling it once it's arrived in whatever country are priced into the basic watch itself. Those things together would imply a mark-up of about 354%. At least$7,800 of the price-tag would be profit.

    But in fact, that might be too low an estimate.


    profit margin mark up on gold Apple Watch Edition - Business Insider
     
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  5. Ian MacGregor

    Ian MacGregor Active Member

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    I would think it goes further than that. Someone had to come up with the idea that Apple uses to process the gold. Engineers were then contracted to create the equipment and methods for said process - knowing Apple, and since they patented it, they're using highly specialized equipment and methods. Not to mention the R&D and QA behind it all.

    Someone once told me that it cost Apple $245.00 to make the iPhone. Possibly, that is if you already have the parts ready to assemble. But, what about the processes, equipment and methods used to create those parts? I think the costs are higher if you have to create the parts from scratch.
     

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