High-end Apple Watch to start at $5,000 -- analyst

The most expensive version could snag around 10,000 in unit sales this year and account for less than 1 percent of all Apple Watch sales, analyst Gene Munster says.

Apple's high-end luxury smartwatch could cost at least $5,000 CNET

Would you pay five grand for the high-end luxury edition of the Apple Watch? That's the starting price that Piper Jaffray analyst Gene Munster sees in his crystal ball.

On March 9, Apple is expected to finally unveil the finer details of its Apple Watch , including the price tags and launch date. The company's first smartwatch will be available in three versions: Apple Watch Sport, Apple Watch and Apple Watch Edition. Apple has already revealed that the entry-level Sport model will start at $349 in the US. But the company has been mum about the prices of the other two models.

In an investors note released late Monday, Munster said he expects that the price for the Sport model could reach as high as $450 depending on different case and storage options. The mid-tier Apple Watch could start at anywhere from $499 to $549 and likely will come closer to an average selling price of $650, according to Munster. But the top-of-the-line Apple Watch Edition could break the bank, starting at $4,999 and potentially reaching closer to $7,500 by factoring in high-end, expensive bands.

That $4,999 price lines up with a projection from Apple observer John Gruber, who forecast the cost of the high-end version last September.

Apple is a latecomer to a smartwatch market already crowded with entries from Samsung, LG, Motorola, Microsoft, Sony, Pebble and other players. Apple's product will be part smartwatch and part fitness and activity tracker, a combination the company is counting on to bring in buyers. But by offering the watch in a luxury edition, Apple is also presenting it as a piece of fine jewelry to further distinguish it from rival products.

Munster remains bearish on Apple Watch sales, estimating 8 million in unit sales this year, compared with Wall Street forecasts of 14 million. But the analyst believes next Monday's event "will finally highlight the special features of the watch and start to excite the public."

Apple will offer interchangeable bands for each of its watches, a factor that will determine the ultimate price. Munster said he believes the elastomer bands for the Apple Watch Sport will range in price from $29 to $39. Leather bands could be priced from $49 to $59. Steel bands could run around $99. And the gold bands for the higher-end edition may run into the thousands of dollars.

How might the three different versions of the watch play out in terms of sales? Munster said he expects the entry-level Sport edition to account for around 55 percent of all units sold this year, while the Apple Watch will contribute around 45 percent. That leaves the luxury Apple Watch Edition contributing pretty much nothing, at least in terms of percentage.

"The Apple Watch Edition is the more difficult to predict, but we believe that with the watch likely starting at $4,999, Apple might sell around 10,000 units in CY15 [calendar year 2015] of our total 8 million estimate, Munster said. "To put the 10k units in perspective, Piper analyst Erinn Murphy, in conjunction with industry estimates, believes that Rolex sells 600-750K watches per year, thus Apple at 10K in the first year would be about 2 percent the size of Rolex. We believe this is a reasonable potential first year size as high-end consumers weigh the power of the Apple brand vs. other luxury watches and the trade-off of quickly depreciating technology in an Apple Watch vs. other more traditional luxury watches that may hold value better."

A spokeswoman for Apple said the company had no comment at this time.

CNET will host a live blog of Apple's March 9 event.

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