When Apple Watch preorders hit the internet on April 10, the company quickly sold out of the devices, which delayed many customer's purchases of the item.
Early estimates predicted that customers pre-ordered more than three million Apple Watches, 1.8 million of which were Apple Watch Sport devices. But how profitable will the devices REALLY be?
Carl Howe is a tech analyst for Think Data Analytics, who recently predicted the three million Apple Watch sales numbers. After digging through the data, Howe is convinced that the Apple Watch will be Apple's "most profitable" line of products yet.
"My belief is that the Apple Watch product line will become Apple's most profitable product line ever, with gross margins exceeding 60 percent. Why? Because the core electronics modules in the expensive models are the same ones used in the Sport models, and they just don't cost that much," he said.
Howe went further and argued that, "the model suggests that while Sport Watch will lead sales in volume, selling 1.8 million units through May 8, Apple Watch will actually lead in revenue during that period, garnering about $900 million versus Sport's $675 million. I also believe that Apple's decision to introduce the Edition will be validated by $500 million in sales on only 40,000 units."
Howe also mentioned that Apple Watch's shipping delays are simply a marketing tool to increase market desire.
While Howe's estimates are surprising, they aren't shocking, considering that Apple had an extensively profitable year in 2014.
Fortune noted that, in January, Apple reported earnings of $3.06 per share on revenue of $74.6 billion. The company will report earnings for the next quarter on April 27.
