If Gruber is close to correct the Apple Watch will fail

Discussion in 'Apple Watch' started by KauaiBruce, Mar 8, 2015.

  1. KauaiBruce macrumors 6502a

    KauaiBruce

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    #1
    There is a fine line between creating demand and turning off the public. I think we all understand that the Apple Watch really IS the base model with the Sport being positioned for a relative inexpensive entry point. The Sport will be great for young adults who have never worn a watch a day in their lives. It is also great for those who just cannot afford anything more.

    However, Apple is clearly expecting there to be a lot of sales on the Stainless Steel version which is evident by that one getting the biggest selection of bands to upgrade to. I think that is Apple is Smart they will also come out with special Limited Edition straps at some time.

    What Apple is famous for is redefining how we interact with the world through technology. They have never been the very first with any given technology's BUT they have been the masters who have figured out how to get the masses to embrace it. They reinvented Computers (twice), music, and phones. Now they want to do this with the Watch.

    Starting with the Macintosh. Yes, there were the earlier Apple computers but those were just for the geeks and you needed to be a geek to use it. Other companies had the technology. I know Tandem Computers (where I worked at the time) had it but our executives did not release it because they thought no one would buy a $7000 word processor. Apple totally got the masses to bring a computer into their homes.

    Then there was the iPod. We all know how that totally changed the dynamic of how people get their music. Remember the Walkman? A total toy in comparison.

    The iPhone was next. We all know the frenzy that created. It was the first truly portable computer.

    The iPad changed our perception of what a laptop is and greatly influenced what we see today.

    Now it is the Watch. This watch is the first step. It's very existence will move research in new directions. I cannot imagine the sensors they might have in 3 or 5 years but I am betting I get one for my old age.

    BUT, for that to work they have to get a lot of these watches out there. I have always embraced new technology. However, with the iPad they did not convince me to try it on the first model. I got the iPad 2 and am still using that one quite happily.

    Now back to the pricing point. Yes, we know they expect to sell mostly Sport models and I expect to see that sitting in my Costco next to the iPads they now sell. I expect the main Apple Watch and Edition models to be available only through Apple both in regular Apple stores and the rumored standalone watch stores.

    People are NOT going to spend over $499 on the First Generation Watch when the only differences are case materials. Like the iPad I could see myself sitting back and waiting to see how it all works out.

    If it is priced correctly then a LOT more will get a base one and one or two straps for variety. If SS starts at $799 with Sports band I know I will NOT be buying one. I think Apple has also already failed in creating any excitement so far in the non iPhone crowd. They will need a LOT of us out here showing them off to get others to want them. The Sport looks too much like a toy in anything other than black.

    SO, Apple needs momentum to redefine the Watch and get people wearing them again. It has to be priced correctly for us to upgrade it in two years.

    ----------

    PS: I forgot to mention the world Economy. It is JUST starting to improve enough for regular people to spend this much on something that truly only saves them a step of digging a phone out of a purse or pocket.
     
  2. KPOM macrumors G5

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    #2
    We'll find out tomorrow if Gruber is close to correct, but we won't know regardless of pricing whether the Apple Watch will succeed.
     
  3. The Doctor11 macrumors 603

    The Doctor11

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    #3
    There is absolutely no way SS starts at $799.
     
  4. MacMiguel macrumors regular

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    Oct 22, 2012
    #4
    Like i said on another post:

    CNET says that it will cost about 550$ fr 38mm SS, are they often accurate?
    https://www.youtube.com/watch?v=NMD49q8a34o

    To be honest, I'm sure that trying to sell the SS version for more than 500€ is very risky for Apple..., let's land on earth: stainless steel is for forks, spoons and knives, is NOT a priced metal
     
  5. KauaiBruce thread starter macrumors 6502a

    KauaiBruce

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    #5
    I totally agree. Sometimes I wonder if Apple fueled the crazy price speculation just to get us to be so relieved when we see the real prices and snatch up the Stainless Steel. I think people will see the Sport one and possibly think "Why not just get a fitbit and pebble? (Hmmm, now just realized the price is almost exactly the same as buying one of each of those). BUT, if people see a great looking watch AND its functionality they are going to want one (but NOT at $800 starting price)
     
  6. PinkyMacGodess macrumors 68040

    PinkyMacGodess

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    #6
    Actually, given the absurd crap the 1%-ers already waste huge sums of money on, the Apple Watch could be an interesting socioeconomic experiment.

    If it succeeds, it would show that the 1% actually can support an economy by themselves. They will have to have it and trust fund cash will be blown on not just one, but probably many of them.

    It could be the new 'In Thing' to be seen with. (Remember when it was toy poodles and small dogs in designer 'purses') The 'fashionistas' will drive this watch into the new must have accessory...

    For me, after the 'meh' experience with the Pebble, I'm in no rush.

    It sounds like the Apple Watch is a one trick pony. It won't harass you when you aren't wearing it. What a novel idea... :rolleyes:
     
  7. PinkyMacGodess macrumors 68040

    PinkyMacGodess

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    #7
    Or a fenix 3 stainless...

    fenix-3-metal.jpg

    It looks pretty awesome, and starts at $599. Add another $100 for the HRM-Run sensor, and you are set. The new James Bond...
     
  8. Julien macrumors G3

    Julien

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    Atlanta
    #8
    Let me help you out.

    I firmly believe there is absolutely no way SS starts at $799.;)

    As a Doctor you should know better than making an absolute statement about something that is an unknown. No matter how strongly you suspected and believed you would never tell a patient they absolutely had a disease without proper examination and testing.

    Also I'm not disagreeing with you assumption (but it is an assumption) and I predicted it stats at $599.
     
  9. KenAFSPC, Mar 8, 2015
    Last edited: Mar 8, 2015

    KenAFSPC macrumors 6502a

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    #9
    One factor Gruber and others have largely ignored in speculating about Apple Watch pricing is the quality of the ecosystem. The Apple ecosystem, as much as anything else, drives device sales. Many people buy iPhones not because they have a special affinity for Apple, but because they want the Apple ecosystem, namely all of the IOS applications and services.

    Apple has the best ecosystem in large part because it is the device platform that provides third party developers the greatest opportunity to make money, directly (via app purchases or advertising) or indirectly (by enhancing the appeal of other revenue-generating products/services).

    Advertising opportunities on the Apple Watch's small screen are limited, which removes a major revenue source for application developers. That leaves developers with having to make money through direct application purchases (perhaps 95% of developers) or by enhancing the appeal of other revenue-generating services (perhaps 5% of developers).

    Without sufficient demand for Watch applications, which requires a large number of Watch users, few developers will create applications for the Watch and the Watch ecosystem -- which is needed to drive future sales -- will not flourish. This is a chicken-and-the-egg type situation, but it is in Apple's best interest to adopt a pricing strategy that pushes volume sales with modest margins, rather than more limited sales with very large margins. The former pricing strategy nets a large base of customers for third-party applications, whereas the latter strategy does not.
     
  10. MacMiguel, Mar 8, 2015
    Last edited: Mar 8, 2015

    MacMiguel macrumors regular

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    #10

    Unless the SS version have more features and capabilities than the sport version, the price would not be justified just because of the materials. We are talking about steel, not even silver! :) But some way I'm pesimistic for tomorrow... Deep inside of my mind I believe that Apple could price SS starting at650$ :( Let's see what happens tomorrow!
     
  11. KPOM macrumors G5

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    #11
    Yes, we all know how Apple priced the iPhone for volume and modest margins, rather than larger margins.
     
  12. Cashmonee macrumors 6502a

    Cashmonee

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    #12
    I agree. Every $100 increment over $499 for the stainless steel will reduce the chance of success for the :apple:Watch as a whole. $799 seems astronomical for essentially the same exact thing I could get for $349. I believe the Stainless could well be the market driver here. I do not think the Sport will be all that attractive in person, and may well look cheap next to the Watch and Edition.

    Someone mentioned the fenix 3 from Garmin, and said it was $599. That is correct, for the sapphire version with a stainless steel band (that retails for $129). They also offer a version with mineral glass and rubber band for $499. Other than the glass, band, and a few styling cues, they are identical. I think that pricing strategy, adding $100, is right. Charging more than double seems ludicrous.
     
  13. KenAFSPC macrumors 6502a

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    #13
    Do I detect a touch of sarcasm?

    At 35-40%, Apple's margins on the iPhone and iPad are ridiculously high compared to its competition. However, the prices speculated for the Apple Watch dwarf the margins on existing Apple IOS devices. A stainless steel Apple Watch will likely cost Apple $100 to manufacture and ship in volume, which would produce a net margin of over 300% at a sale price of $450.
     
  14. The Doctor11 macrumors 603

    The Doctor11

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    #14
    Diffrent kind of doctor. Wibbly wobbly timey wimey doctor ;)

    [​IMG]
     
  15. KauaiBruce thread starter macrumors 6502a

    KauaiBruce

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    #15
    I THINK you were trying to be sarcastic? Not totally clear.

    Apple can justify bigger margin jumps on a phone because it has a bigger screen and more memory.

    Someone else said something that scared me. I will throw it against the wall and put it into a blender the first time my wrist is tapped on and I am staring at a pop up advertisement.
     
  16. cleirac macrumors 6502

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    #16
    This.
     
  17. profmatt macrumors 65816

    profmatt

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    #17
    I will not be so soft on mine if that ever happens.

    If that's what Apple's got in mind, this product is dead in the water. I can't believe it is.
     
  18. mojolicious macrumors 68000

    mojolicious

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    #18
    Heh, that's the bit I don't understand. As far as I can tell, stainless steel trades at a couple of quid per kilogram.
     
  19. KauaiBruce thread starter macrumors 6502a

    KauaiBruce

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    #19
    Agree.
     
  20. KPOM macrumors G5

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    #20
    Yes, I was being sarcastic. The extra NAND between the 16GB and 128GB models costs Apple about $10. They charge $200 more for it.
     
  21. papa8706 macrumors 6502a

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    Apr 24, 2010
    #21
    OP makes some great points. IMO, How is spending $5,000-$20,000 on a 1st generation smart watch anything but a poor investment with an expiration date? Only compatible with the 5S or above so you know when they release new iPhones/watches you're gonna be stuck wanting and/or having to upgrade the latest and greatest. And good luck finding anyone to take a watch of that cost off your hands when it's already last years old news.

    This is why no matter how you want to spin it it's not the same as buying a rolex or high end mechanical watch that holds it value and in essence timeless.

    Fast forward a couple of years. New watch is released (Sleeker, faster processor, new sensors). You know you are gonna want it if you spend time reading in these forums. Are companies out there gonna want to trade in your outdated watches that cost 5-20k a pop and worry about making their money back? Questionable. Or are you gonna collect all the 5-20k apple watches in a nice watch case and wake up every morning wondering what one you want to put on today? No. You won't be able to cause in the near future they won't be compatible as software and features advance beyond the hardwares capability.

    I know this is all my opinion but I just don't see how this makes sense for Apple or the consumer? Am I missing something?
     
  22. ButteryScrollin macrumors 6502a

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    #22
    i'll take that bet.
     
  23. bsforever macrumors member

    bsforever

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    #23
    I've been thinking along the same lines particularly the steel version. IF Gruber's prices are right regarding the Watch Sport and Watch models (~$1000 for the latter), then I'm sorry but the Watch could be headed for a backlash (or at least not as blockbuster an uptake) and this ties in with the New Yorker Ive profile about the pushback he received within Apple regarding positioning these devices for the uber-wealthy or not so wealthy. Really a stainless steel Apple watch, which I assume to be the standard midrange model, costing 1k just breaks that $500 psychological barrier.

    The trick with Apple so far has been that they've been able to avoid these kinds of missteps, premium enough but not so expensive that it turns off your core customer base. But the more I think of the article, and how it made clear that this was Jony Ive's pet project plus there was an instructive comment in there about how 'he's always been a bit bling', and Jony's taste for luxury automobiles, the more I get uneasy about this Watch. It could be a punt too far.

    As for the Watch Edition, I think the market and price bracket it seems to be aiming for are generally of no import/consequence to the rank and file Apple customer.
     
  24. KauaiBruce thread starter macrumors 6502a

    KauaiBruce

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    #24
    I totally agree with you. Only the bands will be reusable with the next model. The base SS with sports strap just cannot be that much higher than the sport if they want to sell a ton of them. I might fork out more for the SS band because I know I can use that with the next model.
     
  25. dacreativeguy macrumors 68020

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    #25
    Apple clearly chose to target the top end of the market. They didn't hire Marc Newson and Angela Ahrendts to make Timex Ironmans. Apple has long positioned itself as a premium brand and has no problems convincing people to pay 2-3 times for products (computers, phones, tablets). The watch will be no different. Those that can and are willing to pay will buy them. Those who can't or aren't won't. There are plenty of other smart watches out there at the low end of the scale.
     

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