But what about the materials used to manufacture it and the production cost? Compared to other Apple products, IHS has analyzed the Apple Watch Sport costs the least amount to make as a share of its sales price. But this isn't a surprise.

"It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost," Kevin Keller, a senior principal analyst at IHS, said in a statement.

The most expensive part of the watch is the 1.34-inch LG touchscreen display. It's USD 20.50. The cheapest component is the 3.8 volt battery pack, which costs less than USD1. Manufacturing is the second smallest expense at USD 2.50, and the wristband and apps processor are the second and third most expensive parts of the watch respectively.

Apple believes the new Apple Watch is going to be a major product category in its lineup. Its first line began shipping to customers last week. Therefore, sales figures weren't included in the past quarter's financial statement.