Apple Watch should cost as much as a deluxe pizza

What should these wearables really cost? $10,000? $500? $350? $200? How about $30?
Written by Jason Perlow, Senior Contributing Writer

Soon, if you're wealthy enough, you'll be able to get carte blanche concierge service if you're willing to pony up $10,000 for an 18 karat gold Apple Watch Edition.

Too rich for your blood? Maybe you should consider one of the entry level "Sport" models, at $350, with the plastic band.

I don't know about the rest of you but I think the early adopter pricing on what is effectively a glorified accessory for your smartphone is nuts. And I'm not picking on Apple here, I think Motorola and Samsung are equally crazy, as is Pebble.

And yes, while I think the Microsoft Band packs a heck of a lot of technology and sensors into a $200 package and has magnificent cloud services and a Big Data analytics platform to back it up, I also think the product is too rich for most people's blood, even though I've tested it myself and I think it's well worth the money.

So what should one of these devices really cost? Well, I think a basic, plastic/rubberized "Sport" type device with the current generation feature sets should cost no more than $30 to $50.

On the surface, this sounds crazy. But let's use existing, un-smart digital watch technology as an example. Back in 1972, the very first digital watch released on the market was the Hamilton Pulsar. It cost $2100, which adjusted for inflation is roughly equivalent to $12,200 in 2015 money.

Sure, the Pulsar was encased in 18K gold, just like the Apple Watch Edition. James Bond wore one in Live and Let Die. But the electronic guts were fairly primitive. To get the thing to even tell the time, you had to press a button to make the red LEDs light up. And that's about all it could do.

Within 10 years, digital watches could be bought in department stores for around $50. And they had much more sophisticated feature sets. Today, the market leader in digital watches, CASIO, has watches at the $40 level that not only have more built-in timer and date functions than you can ever possibly dream of, but they are shock proof and can go 200 meters underwater.

That's technical diver territory, folks. You planning to salvage a wreck anytime soon?

They even have $100 G-Shocks that can be charged using solar power and can set their own time using NIST's atomic clocks over radio frequency.

At the lower end CASIO even has stuff that isn't quite as resilient as the G-SHOCK (in other words, 30 meters of water resistance should be fine for most of you) in the $20 to $30 range.

Which in most states will get you a deluxe pizza with all the toppings. At a real pizza parlor, not Domino's.

So how did CASIO get these things so cheap? Well, they figured out how to engineer integrated circuits at mass scale that allowed them to simplify the production of the devices. Additionally, advances in black and white LCD technology over LED significantly reduced cost and also made the watches much easier to read in full sunlight.

Now, I'm not saying a CASIO G-Shock is anywhere near as sophisticated as an Apple Watch, but the same rules towards mass production apply.

I see no reason why Qualcomm or Samsung, both of which are significant players in the SoC smartphone space could not design a Smartwatch on a Chip (SWoC) platform that didn't cost OEMs $25 at quantities of 1 million plus, which would include sensors for heart-rate, GPS, accelerometer and Bluetooth Low Energy for communication with other mobile devices, as well as a Qi magnetic induction charger interface.

And then you could have your choice of E-Ink or color watchface to attach it to, which would come with a band/enclosure, for another $20-$50. The things would be so cheap that you could have a different watch display/band combo for every day of the week. Remember the original Swatch from the 1980s? Same idea.

That means a basic smartwatch/advanced sports wearable within the next two years that matches the functionality of Apple Watch or Microsoft Band could be produced for $75 to $100. And within 2 years from that $35 to $50. And within five years? $25 to $30.

Pizza land.

What should a smartwatch really cost in terms of bill of materials? Talk Back and Let Me Know.

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