VERY interesting take on the

Watch announcement by John Gruber. He's a very smart cookie.
His guess at
starting prices are remarkably higher than what I would have guessed:
Apple Watch Sport (aluminum/glass): $349 (not a guess)
Apple Watch (stainless steel/sapphire): $999
Apple Watch Edition (18-karat gold/sapphire): $4999
He's sure there will be models selling for far over $10,000.
He also believes:
- Apple are going after the whole $100+ market
- They will place a large emphasis on targeting the luxury watch buyer.
- There is much more to be announced before the official launch.
I love his comment 'There’s a massive pricing umbrella in the luxury watch world, and Apple is aiming to take advantage of it.'
A few days ago I linked to an article that stated Switzerland had won the watch profit war... and Apple goes to where the profit is. If John is right - Apple is putting extraordinary resources to become the winner of the 'wearables' profit war.
I offered a wager that was not taken - and so I guess I'll make a different kind of bet now - and load up on more apple stock. I'm more convinced than ever they are on the right path.
It's a good piece.
The only thing that doesn't make sense - as Gruber himself admits - is that electronics have a very limited life span so "investing" in a $5,000 Apple Watch is kinda silly.
People with money tend to know the difference between an investment, like a $30,000 Rolex, and a frivolous expense like a $5,000 computer.
Having an upgrade path for the electronics, or a trade-in program might help this. But a traditional watch doesn't need it, it doesn't age, and it might even appreciate in price if it's a particularly desirable model.
Anyway not to distract from the Apple Watch - I am sure the vast majority of models sold will be sold for less than $500. I don't see how the steel version would be $1,000 either - steel isn't more expensive than Aluminium?! Sapphire glass isn't expensive either. I'd be surprised if the difference to the low end was much more than $100 or $200.
Gold - well the watch is huge so the raw material alone will make it very, very expensive.
In summary rather than betting the house on the luxury market, I think Apple is
- Making a very compelling product, that does interesting things, for a good price
- Producing the product with a fit and finish worthy of Jony Ive - what other watches are machined to iPhone-like precision? I am guessing, none.
-
Also selling a Gold model to the luxury market to see how that goes. They're tipping their toes, with not much lost if it doesn't end up selling well.
I don't see the luxury market as the end-all-be-all here. More like an experiment they can tackle thanks to their very specific expertise in user interface, materials science, and high-end manufacturing.
If it turns out they can't compete with the likes of Rolex, for that part of the market? Nothing's lost. They've still made the first actually useful smart watch and people will buy it in droves. And that's the bet.
The bet isn't on the luxury market and its mysterious workings. I don't think, for example, Apple will ever compete on the level of Louis Vitton - making a product that sells on brand name alone with no actual merit for the product itself, were it stripped of the brand name. That's not who they are.