Apple Watch Edition: Profits and Concept Explained!

Discussion in 'Apple Watch' started by erronious, Jun 30, 2015.

  1. erronious macrumors newbie

    erronious

    Joined:
    Jun 30, 2015
    #1


    Hi everyone! I've got a video that I put together explaining how much the Apple Watch Edition could potentially make in profits simply from the materials. If you do watch it, please let me know what you think! Thanks!
     
  2. aberrero macrumors 6502a

    Joined:
    Jan 12, 2010
    #2
    I liked it.

    You should note though that the sport band for the Edition also has a gold buckle, which is probably worth a couple hundred bucks.
     
  3. Brett1203 macrumors 6502a

    Brett1203

    Joined:
    Apr 10, 2015
    Location:
    Charlotte, NC
    #3
    Very interesting, but it seems Apple also is aiming the Edition at the Chinese Market where gold its huge there. That is the main reason we have gold iPhones and the new gold Mac, Its mainly because of the demand in China. :)
     
  4. erronious thread starter macrumors newbie

    erronious

    Joined:
    Jun 30, 2015
    #4
    Thanks man! And true, though I don't think the gold buckle would cot hundreds worth in material. The wristband itself doesn't seem to weigh too many grams. But yes, I forgot to mention that.

    That might be true. I'm not too aware of the Chinese market, but I still stand with the idea that the main purpose of this gold watch is to promote the sales of the two lower end models. I don't think Apple cares to sell any Watch Editions at all. :)
     
  5. Mac2me, Jun 30, 2015
    Last edited: Jun 30, 2015

    Mac2me macrumors 6502a

    Joined:
    Jun 10, 2015
    #5
    Production and editing-wise I think it was a nicely put together video piece. If that's your voice, very nice listening quality to it. I'd say you "borrowed heavily" from Apple and Rolex advertising videos and other shots from publications. If you want to do a professional review I think it should be done with all of your own footage. I really didn't like your comment about Jonny Ive slipping in the fact the gold was an alloy. He simply states it, nothing accidentally slipped in there IMO, which to me makes it sound like you're implying something a bit shady there. And that certainly helps set the POV of this piece IMO.

    I don't think the gold watch was priced so high so as to direct people to the sport and stainless version at all. The vast majority of people don't have that kind of discretionary spending to buy the gold version. That said we might be surprised at the number of people who can afford it (with their Apple stock sale or whatever) and simply are happy to buy an Apple product for the care and craftsmanship put into it, first version or not. Silicon Valley certainly has plenty of people made wealthy with their tech stock shares and that's just a small percentage of the world. Many people who have wealth buy quality, well built and designed products. And from what I can tell of the digital watches out there, Apple's watch even in it's first version is IMO way above the rest. I scoffed initially at Apple entering the watch industry and haven't worn a watch in decades. I went into an Apple store however, and after holding the watch and feeling the materials and smoothness of the case design and trying on a few different ones, decided I want to buy one. Bought the SS w BCB and don't regret my purchase at all. Had mine about a month now. This after owning many watches under $50-100 years before. So saying that people aren't buying the AW for craftsmanship I don't buy at all. There were probably a few other items I reacted to mentally when listening to the video but don't recall all of them. The piece does sound like so many other cost "reviews" already out there in POV.

    From a bean counter or stock analysis perspective, I guess I can see why people seem so obsessed to figure out the cost of items like this, how will this affect Apple's bottom line. However, some people do pieces I think to try to discourage people from buying a product, like they have a moral obligation to tell people how they should spend their money. A hard cost or guess-at-cost of specially manufactured parts (not pulled off the shelf like many of those in the smart watches out there) and certainly doesn't account for the soft costs of multitude of hours/years of engineering work, design work, materials work, etc. that goes into a new product like this. So for me articles/videos etc like this are pretty much pointless if you are truly interested in comparing Apple's cost of product to what it sells for.
     
  6. erronious thread starter macrumors newbie

    erronious

    Joined:
    Jun 30, 2015
    #6
    Wow. That's some incredible feedback, thank you! I'm still kinda figuring out my style for putting together videos like this so it may or may not change over time, I'll keep that in mind. I don't have an Apple Watch on me, so I don't video footage of my own to put up. This is more of an "Explained" video more than anything, and I think this can be done without having to buy the product. Now I'll talk to you about most of your points.

    Yes, he simply states it. I worded it wrong and I should've been careful about my word choice. I didn't think about the effect it would have, but it definitely isn't an accident. But what I meant by "slipping that in" is that the average person wouldn't understand that a custom alloy could mean that it's not typical gold.

    About the gold model and its price point, I feel that it gives people this thought in the back of their minds that they practically have the same watch as the gold model since functionality is no different. Of course the average person doesn't have that kind of money, and you're right, a surprising amount of people would have that kind of money to buy the Apple Watch Edition. I agree with that point too.

    I do agree that the Apple Watch is built very nicely and it looks better in person than it does in photos. During the tryout period at an Apple store, the material did feel quite premium even for the Sport model (though the Sport band was a bit underwhelming for me). I have a Moto 360 myself and like the material choice of the Apple Watch over Motorola's offering, but as an Android user, I stick to Android Wear. And your selection of your Apple Watch sounds nice, again, I think it does feel nice to wear and the screen is quite sharp, sharper than most smartwatches on the market.

    Now what I said in the video was that the Apple Watch Edition won't be popular among watch collectors. That doesn't mean absolutely none of them will buy it, but the watch collectors themselves would know that there's more careful attention to detail when making a premium Rolex or Tag Heuer watch. The Apple Watch Edition has just too many components that are glued to the body and another host of problems (refer to the iFixit video if you wish) that would deter watch collectors.

    The point of the video wasn't to show how this affects Apple's bottom line because it simply doesn't. It's not meant to discourage potential buyers either, I'm just simply not a part of the demographic to buy one. And I strictly based the costs on manufacturing parts. I'm aware, as many others are, that there's R&D, labor, marketing, etc. that need to be paid for, but this video strictly looks at what it potentially costs to make the Apple Watch in terms of materials.

    Thanks again for the feedback, it'll help a lot! :)
     
  7. Mac2me, Jun 30, 2015
    Last edited: Jun 30, 2015

    Mac2me macrumors 6502a

    Joined:
    Jun 10, 2015
    #7
    I appreciated your responses.

    Choice of words is important. A poorly chosen word or phrase can connote the wrong impression to your viewer, even turn them off from listening to the rest. I believe you took that footage off Apple's website for the Watch Edition from where Jonny is describing the process involving how the gold alloy was made. I tend to think anyone who watched the whole video segment of it would have gotten that point, knowing what an alloy was and that it wasn't pure 100% gold. Not sure any gold is every 100% gold apart from maybe gold bar. People who buy gold jewelry know that it's not pure and know therefore the cost they are paying isn't for 100% gold. But then again I don't think people buying the Watch Edition are buying it for the cost of the gold in it.

    On the point of making the other watch model purchasers feel that they are getting the same thing as the gold version purchasers, well sure the insides are the same and the pricing difference is more or less for the case (and band to a lesser degree). No different than Toyota selling it's Avalon which when we bought it was the top of the line for them, and selling the same body and mechanics as a Lexus model they charge thousands of dollars more for. It's the finishes and such that add the luxury feel to it and why they are willing to pay more for it. Can't say that has made me feel better or worse about our car choice.

    My comments regarding the Apple Watch compared to other smart watches was to meant to explain why I could see people who might have expensive traditional watches choosing to go with a Watch Edition over other smart watches for their digital choice because of the detail that went into it...from the curved glass face and all the way down to the ease of changing bands for example...plus the exclusivity given by the material choice. I'm also betting that a lot of potential Watch Edition consumers have chosen iPhones as well to use, so it would be the natural choice for them for a smart watch when they make that purchasing move. I seriously doubt they see parts being glued down (which is becoming industry standard) in their watch an a deterrent from buying. Unless they are some true fanboy, also doubt these are seen as "collector watches" unless signed by Tim or Jonny maybe. I do think the Apple Watch will impact the traditional watch market and certainly is going to force many of them to offer their own digital watch to avoid losing those sales. Problem is that apart from their name recognition I don't think they can begin to touch what the Apple Watch and Apple Ecosytem has available. Not even Samsung as a partner. Given that Samsung is attempting to go their own way with an OS, I think it could be confusing times for non-Apple consumers.

    Sorry still don't get the concept/point of the piece since the analysis won't be complete, which is what your thread title and description said it would provide. Material costs without the soft costs doesn't reflect any potential profit realistically made by Apple, and bottom line, as Apple has historically always spent a ton of money on R&D and packaging design, etc., I don't think it really offers any more than IFixit's parts estimations.
     
  8. erronious thread starter macrumors newbie

    erronious

    Joined:
    Jun 30, 2015
    #8
    Particularly, the gold in the Apple Watch Edition is a patented gold, as I mentioned in the video so it makes the gold cheaper. The point I meant to get at was that the composition of the gold is different than standard 18k. But you're probably right that people don't care about its composition, I just found it interesting that they did that and I had no idea, so I mentioned it in the video.

    Agreed. It's still difficult for me to accept the idea that someone would still be willing to pay 10 grand for an Apple Watch, but again, I'm not the target demographic.

    The parts being glued down is an industry standard for tech items, but I don't think that it's that way for watches. It's kind of a weird situation for Apple here because they're trying to produce a luxury watch but it's still a tech item which will probably become outdated with software updates. Again, my perspective was that this was also a watch that would try to target high-end watch collectors. However, I'm not a watch fanatic myself so I could've had wrong assumptions here. I have heard that Tag Heuer has been working on a smartwatch and they're pricing it at $1,400. That's probably going to run Android Wear as well. Samsung is using Tizen OS with one of their smartwatches (their wearable lineup is so confusing), but I don't know why exactly.

    Admittedly, the video was something I decided to do because I just wanted to know how much it cost Apple in parts to produce the gold watch. After doing the research, I thought why don't I just make a video? I had fun doing it and I wanted to try something out with putting a video together with a voiceover. You've pointed out that it's quite incomplete because I didn't really think to include soft costs (which aren't as easy to estimate). I'll probably change the title from "Explained" to "Speculation". Misinformation is quite easily spread. I'll tighten up research for the next video. If I decide I wanna do another one. Haha.
     
  9. Mac2me macrumors 6502a

    Joined:
    Jun 10, 2015
    #9
    While I didn't agree with some of the video, as I said I thought it was nicely produced. The music seemed to flow and timed nicely with the clips. Don't mean to discourage you from future efforts in the least and you did ask for feedback.

    Anyway, so was that your voice in the video?
     
  10. JayLenochiniMac macrumors G5

    Joined:
    Nov 7, 2007
    Location:
    New Sanfrakota
    #10
    Except they ended up not using the special alloy in the Edition, despite having patented it.
     
  11. erronious thread starter macrumors newbie

    erronious

    Joined:
    Jun 30, 2015
    #11
    Yeah I was speaking. I think my voice could use some work, I felt as though I spoke too quickly. And it's fine if you disagree (not that you need my consent to disagree), it helps me consider different viewpoints for future content.

    Huh. Didn't know that. Where'd you find that out? Are they using standard 18k gold?
     

Share This Page