Apple Watch Revenue Will Likely Be Dominated by Expensive Gold Edition

[Vulkan]

I'll be honest, as much as I was interested in one, the only reason I would acquire one now on a heartbeat is if it somehow painlessly it would allow me to test my blood sugar. That would have been the best investment... goodbye needles (I hate needles) and hello expensive super watch.

Even if the watch wasn't waterproof, I would have bought one right away...

I think the sweet price point would have been $250, but if this watch was at least waterproof and water resistant I would have gotten one... I mean it doesn't have to be 300m proof, with 25-50m would have been enough.

That being said, when I look at my pebble on my wrist ugly as it is, it does the basic things: tells the time and date, lets me know when i get texted and it can withstand some heavy rain, washing my hands and a dip in the pool or a swim in the ocean. Then I think that I paid $150 and yeah the Watch is not priced correctly...

But it doesn't matter, because some consumers now a days, it doesn't matter that its a turd in a can, they are going to buy it because it's new, and shiny and because some can while others can't.

For me its not a price dispute, more than a feature dispute. I *CAN* buy one, but why shell $350 if next year's version will be waterproof/resist and will fly?

If you have millions, or you simply can afford it, go right ahead and buy one... It's good all of you, are going to be my beta testers... I will go buy it when it gets to the point that it can out do my cheap-ugly-pebble.

 

[mchoffa]

I personally like the look of the space grey sport model the most (not shiny like the stainless steel). You know there will be a third party market for bands... If I could just get a link bracelet in space grey as well, I'd be happy with the $350 model.

 

[SoiDog9]

Unlikely at $4,000 IMO.

I don't remember anyone saying it was solid gold. I seriously doubt Apple will sell a $4,000 digital watch. I would say it was more likely you would see a 14k or 18k gold plated watch. They could easily do a nice thick electroplating and have it selling for $799 or $899.

 

[Shanley]

Since the bands are interchangeable, my guess is the watch will come with one band, and the rest can be purchased separately? I wonder how much the bands will cost?

Remember, the prices are different, but the functionality is the same.

 

[firewood]

...so why buy the more expensive one?

Because a watch is an excuse for a high-income male to spend as much or more as his wife/GF on something jewelry-like. I know lots of women who spend thousands on expensive jewelry that (from a distance) looks (to me) no different from $49 Walmart bling. I know men who've spent even more on (engagement ring) slave rocks. There are millions of consumers like that.

 

[9699624]

uhhhh 4000$ for a watch that does exactly everything like the entry level with a gold cosmetic? I'm sorry but id rather buy a tag heuer, tissot, citizen, bulova, or an armani watch for that price. IF and IF i do decide to purchase an iWatch it will be entry level.

 

[MNJohn]

Actually, people seem to forget inflation when you say such things. $300 in 1970 is equal to about $1800 today. I'm all for people spending money on things they enjoy though. But from people showing prices of various Rolexes, the values over 20-30 years don't seem to change much when you account for inflation.

Your point about inflation is well taken. I was aware about inflation and the lost opportunity of the value of money when making my point, that's why I chose the cost or the pre-owned Rolex and gold Apple watch to be equal cost in my hypothetical comparison.

In reality, the price increases in fine watches (Rolex, Patek Phillipe, etc), when paying in US dollars, has significantly outstripped inflation. Increased global demand for these watches without corresponding production increases and currency translations are larger factors in the manufacturers price adjustments than US inflation. For example, no new Rolex can be purchased for anything close to your inflation-adjusted value of $1800 today.

My point is that, even when taking into account the effects of US inflation, a worst case depreciation of $800 on a Rolex over 45 year period, only translates to a less than $20 annual cost of ownership for the Rolex. In contrast, my guess is that the annual cost of ownership of a gold Apple watch will be higher by several orders of magnitude.

 

[firewood]

Apple pundit John Gruber of Daring Fireball believes that the expensive gold model could account for the majority of Apple Watch revenue.

Because John Gruber says so, huh?

No. Because most jewelry stores make the majority of their profits from selling the more expensive items in their display cases and vaults. The lower priced stuff just helps bring in traffic.

 

[~Shard~]

I would not shell out $4K for a piece of wearable fashion technology like this which will not appreciate in value and be outdated in a couple years. Not worth it IMO.

 

[diipii]

Silk purses can't be made out of sows ears.

 

[69Mustang]

Better off buying a Rolex that goes up in value.

That this comment has 22 up votes and counting is testimony to the power of marketing and brand recognition. Outside a few special edition Rolex's, they depreciate just like any other watch. While it's true they hold their more of value than most other brands, that doesn't mean they appreciate. Depending on the model and materials used, a 3-5 year old Rolex can hold up to 70% of it's orginal MSRP, again that's not appreciation.

There's nothing wrong with buying a Rolex; especially a used one where most of the depreciation is already gone (think buying a new car vs a 3-5 yr old used one). I personally love some of their models. But to use it's supposed appreciation as an example of a reason to not buy an watch is missing the mark.

 

[IJ Reilly]

Since the bands are interchangeable, my guess is the watch will come with one band, and the rest can be purchased separately? I wonder how much the bands will cost?

Remember, the prices are different, but the functionality is the same.

I've wondered whether the $349 entry-level price even includes a band. They may be sold a la carte, we don't really know yet.

 

[kdarling]

I don't remember anyone saying it was solid gold. I seriously doubt Apple will sell a $4,000 digital watch. I would say it was more likely you would see a 14k or 18k gold plated watch. They could easily do a nice thick electroplating and have it selling for $799 or $899.

The backs of the gold watches that have been photographed, say "18 KARAT GOLD".

In the US at least, it would have add "PLATED" if it isn't solid gold alloy.

Of course, it's always possible that Apple will pull a switcheroo and change to plated at the last second. (It almost seems like they'll have to, if they really think they're going to be selling millions of the Edition.)

Something doesn't jibe, and we don't know what it is yet.

 

[MNJohn]

Look at the auction prices on some early 1900's square Cartier watches. About the same thickness. Not fine jewelry at those prices?

Collectors will pay for original "classics" that are of high demand and limited supply.

The same does not apply to consumer electronics of unlimited supply, marginal demand, built-in obsolence with a bleak prospect for future repair and a design that is 100 years late.

 

[d-klumpp]

no way they are pricing the stainless steel at more than $599. A $100-$200 premium over the sport is more like it.

If they use a price structure typical of mechanical watches, you can add an addition premium for metal bracelet vs leather strap. So I don't imagine the rubber or leather straps being priced the same as the metal bracelet — in any of the case models.

Dave

 

[mazz0]

Does anyone else hate the name Edition? The Apple Watch Edition sounds like it's the Watch edition of the Apple.

 

[Chupa Chupa]

This doesn't make sense to me, it's like selling the iPhone 5 for $2499 and then selling the 5C for $299. There isn't enough of a difference to justify such a large gap.

Except that the iPhone 5 wasn't made out of a precious metal that sells for $1200 an oz. So your analogy is a bit off. Take a look at any brand of watch where there is a stainless model and an 18K solid gold model. There's always a big price gap.

 

[theheadguy]

pricing goes like this

entry watch------$349
stainless watch--$1000
gold watch-------$4000

and you get to choose the strap that goes with the model you like. The strap costs extra. If you don't want a strap you have a pocket watch on a string.

You sound confident, but I think you're way off.

 

[IJ Reilly]

The backs of the gold watches that have been photographed, say "18 KARAT GOLD".

In the US at least, it would have add "PLATED" if it isn't solid gold alloy.

Of course, it's always possible that Apple will pull a switcheroo and change to plated at the last second. (It almost seems like they'll have to, if they really think they're going to be selling millions of the Edition.)

Something doesn't jibe, and we don't know what it is yet.

You mean the rumors and speculation don't add up? Paint me horrified.

 

[Chupa Chupa]

Does anyone else hate the name Edition? The Apple Watch Edition sounds like it's the Watch edition of the Apple.

Yes, it's a nonsense name and not very catchy either. Something simpler like Apple Watch Sport, Apple Watch Classic (or just plain Apple Watch), and Apple Watch Elite would have made more sense while still carrying the "Apple" name in the tag IMHO.

 

[kdarling]

You mean the rumors and speculation don't add up? Paint me horrified.

But that's so rare. lol

Does anyone else hate the name Edition? The Apple Watch Edition sounds like it's the Watch edition of the Apple.

You have look at the initials:

A.W.E.

Which is what you're supposed to be in, when you see it

 

[c1phers]

That this comment has 22 up votes and counting is testimony to the power of marketing and brand recognition. Outside a few special edition Rolex's, they depreciate just like any other watch. While it's true they hold their more of value than most other brands, that doesn't mean they appreciate. Depending on the model and materials used, a 3-5 year old Rolex can hold up to 70% of it's orginal MSRP, again that's not appreciation.

There's nothing wrong with buying a Rolex; especially a used one where most of the depreciation is already gone (think buying a new car vs a 3-5 yr old used one). I personally love some of their models. But to use it's supposed appreciation as an example of a reason to not buy an watch is missing the mark.

Of course it depends on the model, not 100% of Rolex's go up in price, but my point is, if the Gold Watch is $4000, it's better spent on a high end watch, like a Rolex, and opt for a cheaper Apple Watch. I wasn't saying one shouldn't buy any Apple watch because of a lack of appreciation.

Of course there will be the wealthy who just don't care and want to flaunt their bling in full gold at 4K.

 

[thekeyring]

I wonder how quickly the Watch will generate enough revenue to leave the 'Other' category on Apple's quarterly earnings.

 

[CmdrLaForge]

Same could be said about a Rolex vs a Timex watch. I mean, they both tell the time, so why buy the more expensive one?

The difference is the material used. If you want real gold, you can expect to pay a lot. If you are ok with aluminum, then you can pay $350.

Stop. A Rolex is a rolex and a times is a timex. Two different manufactures, completely different inside. Completely different re-sale value. By your argument it wouldn't matter which car you drive because each one can get you from point a to b.

But the apple watch is different. Same manufacturer, same manufacturing, same inside, same functions.

But if you are the someone who buys this edition - hey why not. That is entirely your choice.

I just cannot see that the apple watch edition has a broad appeal if it is really priced according to what Gruber suspects.

 

[firewood]

This doesn't make sense to me, it's like selling the iPhone 5 for $2499 and then selling the 5C for $299. There isn't enough of a difference to justify such a large gap.

You are looking for justification. There is little rational justification for spending thousands on jewelry and purses that look and function very little different from $99 Walmart stock. But millions of (wealthy) consumers buy at the higher price.