Mark Up
Apple can put as much mark up above the all-in costs on an exclusive item like this watch as they like. It's a 'luxury' market that can pay whatever the company (in this case Apple) charge. Therefore there is no doubt in my mind that Apple make a higher profit out of that $17k over say 100 items, compared to the amount of profit they'll be making on the $300 version over say 10,000 items (and that will still be a decent profit even then).
Biting the hand that feeds IT
