Research firm IHS estimates the BOM of the Apple Watch Sport 38mm, the company’s entry-level model, at $81.20. The cost of putting the components together is just $2.50, and this particular model retails for $349.

Staggering margin even by Apple’s standards

In a press release, IHS said its figures don’t include logistics, R&D, software, marketing and other expenses.

However, the firm noted that the product has “the lowest ratio of hardware costs to retail price” of any Apple product thus far, which is a polite way of saying it is the biggest rip-off in the company’s long history.

Of course, this is great news for Apple, as HIS explains:

“While retail prices always tend to decrease over time, the ratio for the Apple Watch is lower than what we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated.”

Kudos Cook

IHS estimates that the Apple Watch hardware costs are only about 24 percent of the MSRP, but the MSRP ratios for other Apple products examined by IHS usually ranges from 29 to 98 percent.

In other words, Apple shareholders really need to think about erecting a monument to Tim Cook, possibly designed by Sir Jonathan.

It should also be noted that the teardown involved Apple’s cheapest watch SKU, so it is safe to assume that it actually has the highest BOM to MSRP ratio of any Apple Watch.

Apple is making much more on other editions of the watch. Bottom line, millions of people are lining up to buy $80 worth of hardware that can barely hold a charge, paying a 400% premium and getting a complementary rubber band.

Well done Apple, well done.