If you’ve already purchased an Apple Watch or are considering buying one, you might think that the device itself is the most expensive part of the purchase. Looking at the price tag, you’d be correct. But if you’re considering buying more than one band for the sought-after new wearable, that’s where Apple’s going to be making the most money from your purchase.
Julia Love reports for Reuters that nearly 20% of Apple Watch buyers are not only spending hundreds of dollars on the smartwatch itself, but are also purchasing a spare band, too. And it turns out that Apple is making a killing on those second Apple Watch bands. Data provided to Reuters by Slice Intelligence, a research firm that mines email receipts, indicates that sales of the Apple Watch itself are just the beginning of Apple’s profits.
Apple is notoriously secretive and hasn’t yet released information on how many units of the Apple Watch it’s sold. So Slice estimates that Apple has sold 2.79 million units as of mid-June. And IHS analyst Kevin Keller tells Reuters that Apple has put a high-tech spin on the razor-blade business model, under which a company sells a product for a modest price and then profits from the sale of accessories to go with it. IHS estimates that the sport band, which retails for $49, costs Apple just $2.05 to make. (Though Keller notes that there are some caveats with the data, as the estimates don’t include expenses like packaging and shipping, and may not account for the full cost of the material Apple uses to make the band.)
The email receipts that Slice studies come from a panel of 2 million people, who are representative of online shoppers in the United States. More than 20,000 of them bought an Apple Watch. And Slice — which analyzed only the bands made and sold by Apple, not any of the third-party accessories already available for purchase — found that about 17% of shoppers purchased more than one band for their new Apple Watches.
The black sport band is the most popular choice among shoppers, both for the band that comes with the device and for extras ordered along with a full watch and band combination. But the $149 Milanese loop is the second-most popular spare band, which indicates that users are going for versatility by purchasing a practical sport band and a more luxurious option.
The entry-level Apple Watch Sport model, which starts at $349, has been the most popular among shoppers so far, according to Slice. But an extra band, which costs as much as $149 for the quilted leather loop or $449 for the stainless steel link bracelet, raise the cost of even the entry-level watch dramatically.
Reuters notes that the popularity of spare bands could indicate that consumers are spending more on the Apple Watch than they originally intended. “It’s just a psychological thing,” according to Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm. “I start with the least investment, and then I spend more money, but I get something else.”
Distinctive bands help customers to match the watch to more outfits or give the wearable a more personal feel. For many users, having a variety of bands can help them become comfortable wearing it everyday and for a variety of activities, which is essential to making the watch worth the sizable investment. Apple has enabled third-party manufacturers to make bands for the Apple Watch, but will not share in the revenue made from sales of those bands.
As bands designed by outside companies grow more popular among users, you’ll undoubtedly have more choices of colors, styles, and materials all along the spectrum of inexpensive bands to very expensive ones. That will likely make it easier to customize your Apple Watch to fit your style without shelling out hundreds of dollars more for an extra band or two. So if you’re looking to customize your Apple Watch but don’t want to spend even more at the Apple store, there are plenty of other options out there for you.