I'm actually a bit surprised that the stainless steel watches seem to be polished at least partly by automation in that Chinese factory.
After all, even $30 Chinese made watches are usually polished by hand, simply because labor is so cheap and automation so rare. (Note that "by hand" means manually holding the case up to a polishing wheel in both cases, not rubbing it by hand.)
Would be interesting to see a picture of the "trained artisans" that Apple says do the polishing. Did they hire experienced gold or jewelry workers? Or is it a marketing phrase describing Foxconn / Quanta employees who have been given on-the-job training.
Or is the gold version made somewhere else?
I don't think it is just a question of manual work vs. machine work. The other issues are quality, consistency, volume, and yield.
If you want lots of parts cheap, you don't care too much about average quality, and you don't mind a certain percentage of the output being terrible, then you can find a company in China (for example) that specializes in that kind of work.
On the other hand, if you want much better quality and fewer rejects, you can
also get that done in China (and in many other places). But you need to pay extra for a better workforce -- both in training and attitude -- compared to the lowest-cost shops. But if you need
lots of high-quality parts in a short time, you have to start adding automation, because you can't get the workforce you need as soon as you need it. The things automation does best -- speed and consistency -- are the things that are hardest in a manual process. You can get quality either way,
if you are able to pay for it.
For the very
best quality, a machine is probably as slow as a person, or needs constant attention from a person -- if a machine can even do it. Million-dollar hand-made watches have better quality than $10,000 machine-made (with human help) ones. But the $10,000 ones are still pretty darn good.
In the case of the gold Apple Watch Edition, I suspect a handful of
really good people can do the final polishing and inspection, and produce the volume Apple needs. It might not matter whether they are in China or somewhere more expensive. This handful of people will be paid very well, no matter where they are.
On the other hand, for the stainless steel Apple Watch, they probably need to make so many that there aren't enough really good polishers available. It would take too long to find them and train them to do the work well. The only practical solution is to invest in insanely expensive machinery that can produce good (but not quite perfect) stuff really quickly.