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Apple Tax: Apple Watch Costs Just $84 to Make

Source: IHS

Source: IHS

The Apple Watch Sport may cost you $349 at the register, but it only costs the company $83.70 to make. That's just 24 percent of the retail price, according to a recent teardown by IHS. Sadly, that's not the biggest "Apple Tax," or the delta between cost to make and cost to buy, that we've seen.

These estimates from analytics firm IHS go on to indicate that the rest of Apple's product lines have a hardware-cost-to-MSRP ratio a few notches higher up, ranging from 29 to 38 percent. Kevin Keller, an analyst at IHS, says, "the ratio for the Apple Watch is lower than what we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated.”

MORE: Apple Watch Review: The Good, The Bad, The Bottom Line

The split of where that left over money goes -- marketing, research, profit and other -- isn't likely to be revealed soon. However, it's clear that Apple is spending heavily on a media blitz to sell customers around the world on why they need to order an Apple Watch. It's worth noting that no model has a shipping estimate lower than four weeks from today.

According to a survey by GlobalIndex, 1 in 4 consumers are interested in the Apple Watch. But given recent reports of faulty Taptic engines and heart rate sensors that don't function properly on tattooed wrests, that interest could wane.

Henry T. Casey is a Staff Writer at Tom’s Guide. Follow him on Twitter @henrytcasey. Follow us @tomsguide, on Facebook and on Google+.