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Apple Working With Swatch for iWatch With Multiple Designs, Price Points?
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HobeSoundDarryl
macrumors G5
free or free*, meaning who pays for them? If someone is paying, that's the subsidy provider. What else in health is free* there? heavily discounted? Again, that's the subsidy. Is there enough in those subsidies to turn a iWatch/health gizmo at an Apple price point with Apple margin into something that seems much less costly, similar to turning $600-$1000 phones into $199*, $99* or free*. That's the idea.
How much do iPhones cost? Often the quick answer is in the subsidized price range. People don't usually quote the full price that Apple gets for each one. They don't even tend to fully think that Apple is still getting paid much more than that $199* or less for each unit sold. It's an innovation that allows a tech company to get it's full target margin without requiring it's end buyers to pay or think about paying the whole amount of money collected. Where else can Apple find a similar model with others who will kick in a subsidy to replicate the same kind of thing? One place I notice (at least here in the U.S.) is the health market, where the insurance companies and/or medicare turn lots of things that cost something into things that cost little-to-nothing out of the end buyers pocket.
It's probably a crazy idea. But, if I was making as much as Apple has made and is making on iPhones via this subsidy model, I'd be very tempted to put a lot of brainpower into answering the question: "Where else can we get others to chip in on the price we want for something we want to sell and still get our target price (& profit)? Where can we replicate what we've done with the iPhone- a product that retains our margin but is able to be priced low for mass adoption?" Among the options, this health channel seems most obvious. And the rumors are thick that this "watch" is loaded with health sensors. So, crazy? Maybe. But there are a few clues that seem to at least lend something to the possibility.
What's the alternative? Can Apple roll out $500-$1000 smart watches and get the masses (beyond this "I'll buy anything from Apple" crowd) to buy? They tried that with the iPhone at the very beginning.
When is the Apple play a cheap price play? Too cheap and it's hard to make a lot of money on the sales without huge "Swatch-like" volume. So if we assume an Apple price- probably an Apple premium- on this iWatch, how do they motivate the masses to buy? I go right back to how they got the masses to buy the iPhone. How can that be replicated with this iWatch? Find the equivalents of AT&T, Verizon, etc to pay for most of it up front, then make their money back in the ongoing usage/service attached to the health parts of iWatch.
How much do iPhones cost? Often the quick answer is in the subsidized price range. People don't usually quote the full price that Apple gets for each one. They don't even tend to fully think that Apple is still getting paid much more than that $199* or less for each unit sold. It's an innovation that allows a tech company to get it's full target margin without requiring it's end buyers to pay or think about paying the whole amount of money collected. Where else can Apple find a similar model with others who will kick in a subsidy to replicate the same kind of thing? One place I notice (at least here in the U.S.) is the health market, where the insurance companies and/or medicare turn lots of things that cost something into things that cost little-to-nothing out of the end buyers pocket.
It's probably a crazy idea. But, if I was making as much as Apple has made and is making on iPhones via this subsidy model, I'd be very tempted to put a lot of brainpower into answering the question: "Where else can we get others to chip in on the price we want for something we want to sell and still get our target price (& profit)? Where can we replicate what we've done with the iPhone- a product that retains our margin but is able to be priced low for mass adoption?" Among the options, this health channel seems most obvious. And the rumors are thick that this "watch" is loaded with health sensors. So, crazy? Maybe. But there are a few clues that seem to at least lend something to the possibility.
What's the alternative? Can Apple roll out $500-$1000 smart watches and get the masses (beyond this "I'll buy anything from Apple" crowd) to buy? They tried that with the iPhone at the very beginning.
When is the Apple play a cheap price play? Too cheap and it's hard to make a lot of money on the sales without huge "Swatch-like" volume. So if we assume an Apple price- probably an Apple premium- on this iWatch, how do they motivate the masses to buy? I go right back to how they got the masses to buy the iPhone. How can that be replicated with this iWatch? Find the equivalents of AT&T, Verizon, etc to pay for most of it up front, then make their money back in the ongoing usage/service attached to the health parts of iWatch.