JPMorgan Suggests Its Margin Assumptions For Apple Watch Is Too Low

In a report published Wednesday, JPMorgan analyst Rod Hall followed up from Tuesday's note which cited reports that Apple Inc. AAPL asked its Asian suppliers to manufacture five million to six million units of its three different Apple Watch models ahead of an April release. In Hall's note on Wednesday, the analyst wrote that it appears half of the production is earmarked for the entry-level Sport model, while the mid-tier model is expected to account for one third of output. The analyst added that orders for the high-end 18-karat gold Watch are currently "relatively small" but according to new reports, Apple plans to start producing more than one million units per month. "The proportion of the higher end models is larger than we had assumed in our central case," Hall wrote. "If this turns out to be correct our margin assumptions for Apple Watch would likely be too low."