iWatch From Apple: Apple iWatch could Lead to Big Profits

“In 2010, iSuppli estimated Apple’s cost of goods plus manufacturing bill was $45.10 for an iPod Nano. The iPod Nano was the little square iPod with a touch screen. It actually wound up being used as a watch by a lot of people, and perhaps was a preview of an iWatch at Apple.”

“Apple sold the 8 GB iPod Nano for $149 and the 16 GB iPod Nano for $179. It’s always an imperfect science relying on iSuppli for costs since Apple buys in bulk and hammers out special deals. However, using iSuppli as a rough estimate suggests the iPod Nano was super profitable.”

“We don’t know what Apple is planning for the iWatch, but if we use this rough estimate, it’s not hard to imagine the margins on an iWatch being quite healthy.”

While all this sounds great, the article touches on something that investors should be aware of: margin collapse.

Releasing an iWatch would appear to be a great move by Apple Inc. (NASDAQ:AAPL). Share your opinion in the comment section below.

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DISCLOSURE: I have no positions in any stock mentioned.

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