[Swordmaker]

The $6.8 Billion revenue figure is based on $400 average per unit sales. . . but the average sales per unit so far has been $505. Why Horace Dediu would think it would suddenly drop to the price of the 42mm Aluminum Sport watch is questionable when Apple has been selling a mix of about 60% sport watches and 40% of the more expensive stainless steel models which sell for $599 to $1099.

With holiday sale pricing, It may drop to closer to $450 per unit average sales per unit price, but not as low as $400. Then the 21 million sales revenue would be more in the neighborhood of a little under $9.5 Billion.

[zeestephen]

Since Apple is also selling its watch through various outside vendors, I will guess the $400 average applies strictly to Apple’s total watch revenue - not to the final average sales price at all stores.

Best Buy and others are almost certainly buying their watches at wholesale, which would pull down Apple’s average revenue per watch.