I found this article interesting, but I don't know enough about this stuff to fact check it.
http://www.slate.com/blogs/moneybox/2015/03/09/apple_watch_edition_the_company_found_a_trick_to_use_as_little_gold_as_possible.html
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High-End Retail Shops Around the World Preparing to Showcase Apple Watch
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I found this article interesting, but I don't know enough about this stuff to fact check it.
http://www.slate.com/blogs/moneybox/2015/03/09/apple_watch_edition_the_company_found_a_trick_to_use_as_little_gold_as_possible.html
It seems like you would be the perfect target audience for that watch then. So seriously curious, are you thinking of buying one? I really wonder how this will stand up to a Breitling, Patek Philippe, Rolex, etc., if those are even the right brands to compare in that price range.
My initial thought would be "poorly." But Apple is Apple.
My guess is it's for the money and to establish brand prestige.
Hypothetically, If 1% of the Apple watches were Edition (avg $12k), 24% stainless steel (avg $700) and 75% Sport (avg $370), then
21% of their watch revenue will come from Edition, alone; and 49% will come from Sport. So even if Edition gets outsold 99-1 it will have a heavy impact on revenue.
you are only partly right.
do people who buy LV bags for 2K if you can get the same bag at walmart for 20 dollars without the logo?
I'd say no. Apple watch is the same internally betwween 350 vs 10K, it'd take a massive moron to buy that.
If there is such a person, I have a 1996 Corolla which I can have it made of 18K gold and sell it for 1 million dollar profit
Then why can't we have specialised Pro hardware?
Apple need to maintain or increase margi - or why bother?
It would take less R&D and I would pay more (and for a greater margin) if I could buy decent pro hardware and software.
YES. Absolutely yes. People buy LV bags for 2K even if there are knockoffs available for much cheaper. That's how companies like Burberry, Louis Vuitton thrive and many luxury makers make outrageous money. And that's why Apple is hiring execs from these companies to find out how they are able to sell their products as such prices.
Currently China is going through a 'love-affair' with genuine (vs knockoff) name brand luxury items... consuming more luxury goods than the rest of the world combined.
.
Very poorly. Wouldn't buy this thing in a million years. This Apple product offers me nothing that I look for in a $10K+ watch. No heritage, no artistry, no history. It's a digital product. It's not a "lifetime" watch. No one is going to attach "prestige" to an Apple product, not that I buy expensive watches for that reason anyway. You'd be surprised at how little a $10K watch on your wrist gets noticed. It's usually only the other watch enthusiasts you meet that notice. And speaking of other watch nuts, not one in my circle of fellow "watch people" is even looking at this watch. In fact, if you go on any high end watch owners forum (rolexforums, for instance), Apple is getting laughed at for these decisions. And these are the very same people that ARE the target market for the Edition piece. When you own 10, 20, sometimes even 50+ Rolexes/etc, you're exactly the people Apple hopes will want this watch. And they don't.
we aren't talking about knockoffs. or else I'd fork over 50 dollars for that knockoff from the show a few months ago.
we are talking about the EXACT SAME product, from the same company. I will say it again, only massive idiots will buy this. (and please also buy my old corolla which I can cover it in gold)
so basically Apple discovered a technicality that let's them label the watch as 18k gold without using much gold. kudos to them then and fatter margins.
To appeal to the high end set. To add status and prestige to the Apple name. To break in to the fashion market. To make people want the watch through virtue of the 'unattainable' - people can't buy the $10k version but the $350 may look more appealing and scratch that 'latest, greatest and cool' itch.
I don't think Apple is aiming at those people at all. I think they are aiming for the high end set who spend money on a whim and don't bat an eye at 10k, who like technology and the latest and greatest. That market doesn't necessarily overlap with those who buy the high end 'timeless' watches.
then Apple is doing it wrong.
the best way to creat for the highend is actually creating a completely different watch from the ground-up for the highend clients. not slap on some gold on a sub 400 dollars watch and post a ridiculous price for it.
Rich people aren't idiots, if they can get things cheaper, they would. They didn't get rich by spending money stupidly
Still YES. don't underestimate the power of brand (nevermind status and scarcity)
If someone was to shell out $120k for a Porsche, and you offered them the same Porsche with logos removed for $115k (and assuming they couldn't get them anywhere else), I'll guess/bet that they will pay the $5k just for a logo ... probably even more, if Porsche didn't have such a distinct look. People will spend outrageous more for the brand, status (and other reason) etc.
I'm not saying it's right or wrong or judging their values, it is what it is.
18 karat gold needs to be 75% gold by ratio to the other materials, which is a standard that the gold Apple is using in the
WATCH EDITION meets. So it's legally 18 karat gold.From the article:
"The key thing to remember is that 18-karat gold is not 100 percent gold. It's an alloy, or mixture. Three-quarters of its mass must be made up of gold...And by mass, the final product is still 75 percent gold."
Perhaps the bulk of the
WATCH EDITION customer base will be Trust-Funders and others who did not "work hard for their money", so to speak. 
Watch Edition = Limited Edition.
Apple will only produce 10 watches (I make up this number but you got my point: it's very rare item/ in popular game it is sometimes called Legendary Item) for Limited Edition. As this is a collector edition, the price is actually pretty decent. Only the richest, from Oil Kings in Middle East to Gold Emperors in the East, to Diamond Queens from Europe, are the potential buyers. For you and me alike, it's beyond our dream. But, don't be disappointed. There are cheaper, way cheaper versions, called Sport Watch and Watch which starts from a very reasonably price at 350 dollars.
Apple will only produce 10 watches (I make up this number but you got my point: it's very rare item/ in popular game it is sometimes called Legendary Item) for Limited Edition. As this is a collector edition, the price is actually pretty decent. Only the richest, from Oil Kings in Middle East to Gold Emperors in the East, to Diamond Queens from Europe, are the potential buyers. For you and me alike, it's beyond our dream. But, don't be disappointed. There are cheaper, way cheaper versions, called Sport Watch and Watch which starts from a very reasonably price at 350 dollars.
*shrugs* Time will tell. It hasn't even launched yet, we have no idea how people will react. But I would wager there are more people than you might think who are willing to drop 10k on a high end smart-watch because that market simply does not yet exist.
You somehow missed the words in that article: POSSIBLE, SPECULATED, IN THEORY, GUESSES, ETC.
Oh human ignorance...
18 karat gold needs to be 75% gold by ratio to the other materials, which is a standard that the gold Apple is using in the
From the article:
"The key thing to remember is that 18-karat gold is not 100 percent gold. It's an alloy, or mixture. Three-quarters of its mass must be made up of gold...And by mass, the final product is still 75 percent gold."
They're using ceramic particles which is less dense per unit volume than the traditional alloys used (silver, nickel, copper, etc.) which allows them to use less gold while still maintaining the 75% needed. Great for Apple, not so good for consumers.
Sweet spot
I don't know how many active iPhone users there are. They've sold 700M, so let's say 300M are active (perhaps conservative).
If 20% of those buy an Apple watch, and 1% of *those* buy an Edition:
Likely average transaction: >$15K, including an extra band or two.
So that's $15K * 600K transactions = a tidy $9B just from the Edition. With profit margins of several hundred percent. At least $6B in profit, and probably more.
I think my 20% buy-rate is maybe a little low, as is the 300M active, but maybe not.
No matter what, it's hard to imagine a better spot to be in. Giant profits AND all those free celebrity "endorsements", promoting the entire line. I can't imagine we'll be seeing too many celebs sporting a Samsung watch unless they're paid to do so.
I don't know how many active iPhone users there are. They've sold 700M, so let's say 300M are active (perhaps conservative).
If 20% of those buy an Apple watch, and 1% of *those* buy an Edition:
Likely average transaction: >$15K, including an extra band or two.
So that's $15K * 600K transactions = a tidy $9B just from the Edition. With profit margins of several hundred percent. At least $6B in profit, and probably more.
I think my 20% buy-rate is maybe a little low, as is the 300M active, but maybe not.
No matter what, it's hard to imagine a better spot to be in. Giant profits AND all those free celebrity "endorsements", promoting the entire line. I can't imagine we'll be seeing too many celebs sporting a Samsung watch unless they're paid to do so.
Yes it will, seems their marketing is even stronger than Apple if you believe otherwise
Based on what I have read, this new process will save Apple around 6 grams of 24k gold per watch, so unless consumers were planning to melt down their watches to recover the gold...