Great article on Apple the wearables company

[Rogifan]

I'm a real fan of Matthew Panzarino @ Tech Crunch. He just put up a great article about Apple, wesrables and Apple retail. I especially like the passage below:

http://techcrunch.com/2015/03/08/selling-a-wearable-apple/

A billionaire still can’t buy better phone than you or I (if you’re a billionaire reading this, hi), but they can certainly buy one that makes them feel differently. If someone with the means wants to buy an iPhone and have it coated in precious liquid metal, why not? And if Apple wants to facilitate that, more the better.

The argument that Apple is doing something awful by offering a more expensive item that works the same way as a lesser expensive item is stupid.

The fact that the version of the Apple Watch that could cost thousands works the same as the one that costs a few hundred is actually more friendly to everyman market, not less.

The common logic is that if someone is buying something made of gold rather than a functional aluminum, they’re being wasteful or silly. But if you’re the kind of person that believes you’re being smarter by buying the least expensive, most utilitarian version and you look down on someone wearing a precious metal, then you’re engaging in the exact same kind of snobbery — just in reverse.

To put it simply, it’s not about luxury, it’s not about how it works — it’s about how it makes you feel.

 

[Piggie]

That's going to be THE problem here.

At the moment, a few people can "feel" better than others as they have something others don't yet have, and it make them feel special.

(actually this is a bit sad, but never mind)

And one of the reasons why they buy very very expensive items, to keep that feeling going.

Once the watch is launched to the unwashed scum, and there are millions of them to be seen everywhere up and down the streets, these people won't want to wear them any more and will revert back to their high end watches to give them that feeling again.

Right now it's fun for them to "wear something you can't have" but that feeling is going to end sharply for them.

 

[Rogifan]

That's going to be THE problem here.

At the moment, a few people can "feel" better than others as they have something others don't yet have, and it make them feel special.

(actually this is a bit sad, but never mind)

And one of the reasons why they buy very very expensive items, to keep that feeling going.

Once the watch is launched to the unwashed scum, and there are millions of them to be seen everywhere up and down the streets, these people won't want to wear them any more and will revert back to their high end watches to give them that feeling again.

Right now it's fun for them to "wear something you can't have" but that feeling is going to end sharply for them.

I don't get your point. Anyone buying the watch knows they're all the same except for the materials and packaging. And it's not like the Edition watch is being launched months before the other collections so those buyers would never be wearing something others can't have.

If I could afford the Rose gold with taupe/grey band that's what I would get. Not to feel exclusive but because I like it from a fashion/design standpoint. Why do we have to assume everyone interested in the gold watch is just about showing off or feeling "exclusive"?

 

[cambookpro]

I think we may see the Apple Watch Edition as being somewhat of a Veblen good - that is, having a perverse demand curve (i.e. the more expensive it is, the more people will buy it for the prestige owning one offers).

Will it matter that the aluminium version of the same watch will be available to the masses? Possibly. Though I wouldn't be surprised if the Edition was many thousands of dollars, just to maintain some sort of exclusivity.

It'll be interesting from an economist's point of view, anyway

 

[Rogifan]

I think we may see the Apple Watch Edition as being somewhat of a Veblen good - that is, having a perverse demand curve (i.e. the more expensive it is, the more people will buy it for the prestige owning one offers).

Will it matter that the aluminium version of the same watch will be available to the masses? Possibly. Though I wouldn't be surprised if the Edition was many thousands of dollars, just to maintain some sort of exclusivity.

It'll be interesting from an economist's point of view, anyway

Here's the thing, from what we know right now there's nothing really special about the gold watch other than its gold and comes in a nicer box. What if the gold watch is more about fashion/style than exclusivity? If Apple was going down the exclusivity route the gold watch might have had a completely different design or offered functionality the other collections didn't. So I think it's more about style than anything else and mostly about wanting to offer something that would appeal to women.

 

[Piggie]

I don't get your point. Anyone buying the watch knows they're all the same except for the materials and packaging. And it's not like the Edition watch is being launched months before the other collections so those buyers would never be wearing something others can't have.

If I could afford the Rose gold with taupe/grey band that's what I would get. Not to feel exclusive but because I like it from a fashion/design standpoint. Why do we have to assume everyone interested in the gold watch is just about showing off or feeling "exclusive"?

No they're not NOW.
I mean you may see a few with them now, and they feel special at they have them before they go on sale.

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If I could afford the Rose gold with taupe/grey band that's what I would get. Not to feel exclusive but because I like it from a fashion/design standpoint. Why do we have to assume everyone interested in the gold watch is just about showing off or feeling "exclusive"?

Because your desire for the gold one is totally artificial and in your mind due to how society at this moment in time views it.

It may not seem this way, but believe me it is.
We are all this way as we are part of society and it's very hard not to think how you are supposed to think at any given time.

You like gold based upon how gold is seen in society, not because you like it
I know it's hard to get your head around this.

A different time, a different place, a different society, you would be queuing up for the very rare very expensive plastic one. Vogue would be showing off plastic on their front cover.
Gold would be the cheap one that none of us really wanted, but was the only one most of us could afford

 

[papa8706]

I don't get your point. Anyone buying the watch knows they're all the same except for the materials and packaging. And it's not like the Edition watch is being launched months before the other collections so those buyers would never be wearing something others can't have.

If I could afford the Rose gold with taupe/grey band that's what I would get. Not to feel exclusive but because I like it from a fashion/design standpoint. Why do we have to assume everyone interested in the gold watch is just about showing off or feeling "exclusive"?

In a way you just answered your own question. You would get that rose gold watch cause you like it the best, but you won't because it could be $5,000-20,000. No one in their right mind can justify going from $350 to up to $20,000 just because they like the look more. It's safe to assume people who make this decision justify it among other reasons and "feel" premium and exclusive doing so.

IMO, the watch is too early in it's development to justify debuting at such price points. There are too many questions left unanswered, some they won't be able to answer until years to come. No matter what way you spin it from a fashion perspective it's still a wearable computer on your wrist, running on a S1 chip and an iOS. Both of which will become dated ever so quickly then what?

 

[Rogifan]

No they're not NOW.
I mean you may see a few with them now, and they feel special at they have them before they go on sale.

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Because your desire for the gold one is totally artificial and in your mind due to how society at this moment in time views it.

It may not seem this way, but believe me it is.
We are all this way as we are part of society and it's very hard not to think how you are supposed to think at any given time.

You like gold based upon how gold is seen in society, not because you like it
I know it's hard to get your head around this.

A different time, a different place, a different society, you would be queuing up for the very rare very expensive plastic one. Vogue would be showing off plastic on their front cover.
Gold would be the cheap one that none of us really wanted, but was the only one most of us could afford

WTH are you talking about? You don't know what I like or why I like it. I'd never be seen with the yellow gold watch but I think the Rose gold one is beautiful. I couldn't give a crap less how gold is viewed by society.

 

[Piggie]

WTH are you talking about? You don't know what I like or why I like it. I'd never be seen with the yellow gold watch but I think the Rose gold one is beautiful. I couldn't give a crap less how gold is viewed by society.

Oh, sorry for confusing you, I though you would accept that we are all products of our society and the whole like, dislike thing is artificial and created in our mind by the society we grow up in.

Don't you understand that?
Another time, another place, we would have totally different views, likes and dislikes.
None of this is actually real, it's just how our brains are wired up based on our upbringing.

 

[Night Spring]

WTH are you talking about? You don't know what I like or why I like it. I'd never be seen with the yellow gold watch but I think the Rose gold one is beautiful. I couldn't give a crap less how gold is viewed by society.

Yes, you could like rose gold even if it cost the same as plastic.

But you are willing to pay a hefty premium for getting a watch in that color. That you think that the color is worth that premium -- that, I have to agree with Piggie, is most likely a result of social conditioning.

 

[Rogifan]

In a way you just answered your own question. You would get that rose gold watch cause you like it the best, but you won't because it could be $5,000-20,000. No one in their right mind can justify going from $350 to up to $20,000 just because they like the look more. It's safe to assume people who make this decision justify it among other reasons and "feel" premium and exclusive doing so.

IMO, the watch is too early in it's development to justify debuting at such price points. There are too many questions left unanswered, some they won't be able to answer until years to come. No matter what way you spin it from a fashion perspective it's still a wearable computer on your wrist, running on a S1 chip and an iOS. Both of which will become dated ever so quickly then what?

I said if I could afford it I would own it. There are lots of people that buy expensive things that are out of style within a year/season. They spend hundreds of dollars on a pair of shoes that don't last forever or aren't "in" a year later.

We still don't know how quickly the watch will age. Or if there will be upgradeability for the more expensive watches. I can't see the display becoming outdated that quickly and I'm sure if nothing else the battery will be able to be replaced. And who knows with the S1 chip. This product is unlike anything Apple has done before so the existing rules don't necessarily apply imo.

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Yes, you could like rose gold even if it cost the same as plastic.

But you are willing to pay a hefty premium for getting a watch in that color. That you think that the color is worth that premium -- that, I have to agree with Piggie, is most likely a result of social conditioning.

Really? So gold is more expensive than aluminum because of social conditioning? And what does that have to do with the original post?

 

[Piggie]

Yes, you could like rose gold even if it cost the same as plastic.

But you are willing to pay a hefty premium for getting a watch in that color. That you think that the color is worth that premium -- that, I have to agree with Piggie, is most likely a result of social conditioning.

Indeed.
We could live in a place, on a world where oil created from ancient life from millions of years ago was incredibly rare and vastly expensive.
Only the very richest people in the world would be able to afford and thing made from it such as plastic.
Likewise, we could have gold chipping covering our driveways as there was so much of it around it was practically worthless and no one would really want to be seen so poor they could only afford a gold watch.

Seems funny I know, but either scenario is equally valid

 

[Night Spring]

Really? So gold is more expensive than aluminum because of social conditioning?

Hmmmm. In the case of gold, I think it is harder to produce than aluminum, so part of the price is rarity.

However, you being willing to pay more than 10x as much as the aluminum just because you like the color more? I mean, how is that logical?

 

[Rogifan]

Oh, sorry for confusing you, I though you would accept that we are all products of our society and the whole like, dislike thing is artificial and created in our mind by the society we grow up in.

Don't you understand that?
Another time, another place, we would have totally different views, likes and dislikes.
None of this is actually real, it's just how our brains are wired up based on our upbringing.

What does that have to do with the original post. I don't really care why someone chooses to buy the gold Watch. I just think the reverse snobbery argument is interesting and something I actually agree with. If you have no use for a gold watch or think the price is ridiculous don't buy one. The aluminum watch with the exact same functionality is right there waiting for you.

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Hmmmm. In the case of gold, I think it is harder to produce than aluminum, so part of the price is rarity.

However, you being willing to pay more than 10x as much as the aluminum just because you like the color more? I mean, how is that logical?

Who said people's decisions are always logical or rational? And honestly I don't care what someone else does with their money.

 

[Night Spring]

Who said people's decisions are always logical or rational?

Well, that's all Piggie was pointing out, really. Our decisions aren't always rational. There are a lot of emotional factors, and some (most) of that is social conditioning.

 

[Rogifan]

Well, that's all Piggie was pointing out, really. Our decisions aren't always rational. There are a lot of emotional factors, and some (most) of that is social conditioning.

And? So what? I can't get worked up over the gold watch when the aluminum one with same functionality exists. If someone has the disposable income and wants to buy a gold watch be my guest. As I've said before though I think the gold collection is more about fashion and catering to women than anything else.

 

[papa8706]

I said if I could afford it I would own it. There are lots of people that buy expensive things that are out of style within a year/season. They spend hundreds of dollars on a pair of shoes that don't last forever or aren't "in" a year later.

We still don't know how quickly the watch will age. Or if there will be upgradeability for the more expensive watches. I can't see the display becoming outdated that quickly and I'm sure if nothing else the battery will be able to be replaced. And who knows with the S1 chip. This product is unlike anything Apple has done before so the existing rules don't necessarily apply imo.

You asked why everyone had to assume that the people who are interested in the gold edition are trying to be exclusive/show off and don't just like the look. All of the marketing points to this being "exclusive". Most people can't afford a watch that costs as much as a car. As others stated, gold has always been more premium/flashier. While some may like the look, it's priced too high to make this the only determining factor. Many, not all, of the people buying this "feel" it is better/more premium than what everyone else is wearing and that justifies the price disparity.

Apple loves to pretend they are revolutionizing the market, this like many of their claims, just isn't true. This is nothing more than Apple's first attempt at a smart watch. Samsung, Pebble, Moto, LG and many other are doing the same thing. One of the biggest failures in the competition is they are bulky and just don't look as nice as regular watches. I'm all for a sexier smart watch and while it isn't perfect, I think it's a solid step forward.

My issue is just cause Apple is going to use SS and 18K gold and market it as fashionable doesn't mean it's not still a smart watch. I feel they would be much better off pricing them in a way that enables more than 1% of the population to be able to buy one without taking out a second mortgage and worrying if they will ever be able to afford the next generation upgrade or if they merely sold their soul for 2 years of iOS on their wrist. Again just my 2 cents

 

[camtechman56]

Indeed.
We could live in a place, on a world where oil created from ancient life from millions of years ago was incredibly rare and vastly expensive.
Only the very richest people in the world would be able to afford and thing made from it such as plastic.
Likewise, we could have gold chipping covering our driveways as there was so much of it around it was practically worthless and no one would really want to be seen so poor they could only afford a gold watch.

Seems funny I know, but either scenario is equally valid

Profound! and totally correct, In a matter of fact if anyone were to research aluminum they would find that when aluminum was first made, aluminum was so difficult and expensive to process that it was more valuable than gold. ( a bit of trivia )

 

[Rogifan]

Here's another great piece from MG Siegler. And it shows off my favorite Watch beautifully.

https://medium.com/five-hundred-words/apple-s-fork-into-fashion-75b1da59c9b9

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My issue is just cause Apple is going to use SS and 18K gold and market it as fashionable doesn't mean it's not still a smart watch. I feel they would be much better off pricing them in a way that enables more than 1% of the population to be able to buy one without taking out a second mortgage and worrying if they will ever be able to afford the next generation upgrade or if they merely sold their soul for 2 years of iOS on their wrist. Again just my 2 cents

Well there is the $349 aluminum watch that has the exact same functionality as the gold watch. Or are you saying because not everybody can afford the gold watch Apple shouldn't offer it? I would agree with you if all Apple was offering was a $1K or $10K watch but they're not.

 

[Blakjack]

Right now it's fun for them to "wear something you can't have" but that feeling is going to end sharply for them.[/QUOTE]

delete

 

[papa8706]

Here's another great piece from MG Siegler. And it shows off my favorite Watch beautifully.

https://medium.com/five-hundred-words/apple-s-fork-into-fashion-75b1da59c9b9

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Well there is the $349 aluminum watch that has the exact same functionality as the gold watch. Or are you saying because not everybody can afford the gold watch Apple shouldn't offer it? I would agree with you if all Apple was offering was a $1K or $10K watch but they're not.

I'm not saying you aren't making valid arguments I just don't agree with the if the whole idea that the above-average consumer isn't good enough for gold. If they want to have a solid 18k gold watch for 20k whatever, but why not bring more options to the rest of the masses other than aluminum and synthetic rubber.

I can't wear a sport watch with a fitness band to a formal work environment. Despite all my whinin,g I've wanted the SS link model form the get-go I'm just nervous they are gonna over price that too. The way they described the 9 hour process they use to cut the links sounds like they could be prepping everyone the the jaw drop. To each their own I guess, good luck getting yours

 

[extricated]

Why do we have to assume everyone interested in the gold watch is just about showing off or feeling "exclusive"?

I like the thoughts you've been sharing here.
I would love the stainless steel with link bracelet, but if it's going to be in the "Gruber" price range, forget it. If I had the income, however, then I'd be all over it. Not for the exclusivity, but because I like it and could afford it.
If someone can afford the gold (even if it goes for $20k), great for them! It's not my job to make a morality (or practicality) call on other people's choices.

Thanks for sharing.

 

[rjlawrencejr]

My issue is just cause Apple is going to use SS and 18K gold and market it as fashionable doesn't mean it's not still a smart watch. I feel they would be much better off pricing them in a way that enables more than 1% of the population to be able to buy one without taking out a second mortgage and worrying if they will ever be able to afford the next generation upgrade or if they merely sold their soul for 2 years of iOS on their wrist. Again just my 2 cents

Perhaps I'm missing something but I was under the impression at least 50% of all Watches produced will be of sport variety.

 

[papa8706]

Perhaps I'm missing something but I was under the impression at least 50% of all Watches produced will be of sport variety.

Where did you read at least 50% of all apple watches will be of sport variety? That was never stated but I'm sure if these price predictions are accurate then the sport/fitness would be the only one affordable enough for a majority of the population.

But you missed my point. There are 3 different collections. The sport has aluminum with rubber fitness bands of various bright colors. That's fine for working out or casual use but many people can't wear something like that into a formal work environment.

Many reputable designers have SS and gold watches that are reasonably priced. People are already throwing the SS apple watch with the link bracelet around $1,500 and the gold edition up to $5,000+.

The point I was making was if they overprice two thirds of the collection it would make most of the products unavailable to the majority of their consumers who certainly can't afford to make that kind of smart watch purchase every couple of years when they pop out a new one. This is just my opinion but I think it's a lousy route to go but come tomorrow we'll see.

 

[Rogifan]

Here's something to think about rericing. This is a quote from the FT interview with Jony Ive:

However, it was not without some trepidation that he embarked on the watch. “It was different with the phone – all of us working on the first iPhone were driven by an absolute disdain for the cellphones we were using at the time. That’s not the case here. We’re a group of people who love our watches. So we’re working on something, yet have a high regard for what currently exists.”

That comment could be taken several ways but I look at it as Apple taking cues from the watch industry in terms of craftsmanship but not necessarily trying to position Watch as the equivalent to a luxury watch. You'll notice it's other companies slavishly copying the look of traditional watches whereas Apple decided to go with a rounded rec because they felt the functionality warrented it. This is where I'm not certain Apple will price Watch as though it is an equivalent of luxury watches. I think the design and craftsmanship alone will command a premium and make it pricier any other smart watch on the market but that doesn't mean Apple has to go full on luxury watch pricing.