Apple Watch Revenue Will Likely Be Dominated by Expensive Gold Edition

Earlier this week, in a report about the Apple Watch's missing health features, The Wall Street Journal claimed that Apple has placed 5 to 6 million Apple Watch orders with overseas suppliers ahead of the wrist-worn device's launch in April.

The report specified that half of the first-quarter orders will be allocated to the entry-level Apple Watch Sport, while one-third of shipments will be for the mid-tier Apple Watch. The remaining orders will be for the expensive Apple Watch Edition.

While the Apple Watch Edition will have the least amount of orders among the three models, with between 850,000 to 1 million units shipped, well-known Apple pundit John Gruber of Daring Fireball believes that the expensive gold model could account for the majority of Apple Watch revenue. Multiple reports claim that the Apple Watch Edition will cost over $4,000, making it one of the most expensive products the company has ever sold.

"So as a business - if the WSJ's sources are correct, and if Apple is correctly predicting demand - Apple Watch revenue will be dominated by the gold Edition units, accounting for double or more of the revenue from all the other models combined. The Edition models would thus do to the Apple Watch lineup as a whole what the iPhone, iPad, and Macintosh do to the entire phone, tablet, and PC industries, respectively: achieve a decided majority of the profits with a decided minority of the unit sales."

Apple Watch will start at $349 for the entry-level Sport model, while pricing information for the other two models has not been confirmed. Apple will reportedly increase production of the Apple Watch Edition to over 1 million units per month in the second quarter, indicating that demand could be strong for the company's first new product since the iPad in 2010. Early sales predictions for the Apple Watch have been all over the map, ranging from between 8 million to over 26 million units during 2015.