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The Progression of Stainless Steel in Apple Products
- Thread starter MICHAELSD
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SS is the cheap material when you enter the world of watches.
The problem with watches is that they need to be durable, SS is an excellent choice. Dont worry about all the videos, it's all markerting, the sports and SS watches will scratch.
The problem with watches is that they need to be durable, SS is an excellent choice. Dont worry about all the videos, it's all markerting, the sports and SS watches will scratch.
Yep, they were stainless steel. And they did scratch.
The OP has an interesting point about the pricing differential vs material costs of aluminium vs stainless steel. That said, Apple already gave their game away by pricing their gold watch far, far in excess of the incremental material cost.
Personally, I think Apple wanted to price their most "conventional" watch at $999 in order to meet preferred revenue and margin goals. By conventional, I mean stainless case with a stainless bracelet: Probably the most purchased watch of all time?
Of course, $999 is a bit on the high side for a mainstream watch, so Apple unbundled the SS bracelet and made it a separate purchase. Now the stainless watch lists at a more "conventional" $550 to avoid sticker shock and draw initial interest. Once the customer is interested, the bracelet upsell begins. It can even happen months later, when the customer's finances have "recovered"
Really quite clever.
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As a customer, that's exactly the correct position you should be taking.
Yep, looked like hell if you didn't use a case, I remember looking at it and deciding I'd never use another Apple product without a case, LOL.
No, I shouldn't. Being a customer doesn't mean be unreasonable. The stainless steel model costs more to me because it costs Apple more to make. I'd love it if Apple just gave me one for free, but that's not realistic. Realistically, I expect to pay more money for higher quality products.
No, you're not going to get a watch for free. Not sure where you got that idea.
That said, for the free market to work correctly and for goods to be supplied at reasonable prices, customers must to be prepared to walk. That's how the game is played. It doesn't mean you have to be unreasonable, but you shouldn't be overly accommodating either. Balance is key.
I didn't get that idea. I was saying to illustrate the difference between how much money I want to spend vs. how much I'm willing to spend.
Customers must also be willing to pay a reasonable price, and that line is subjective. I personally don't find Apple's prices to be unreasonable.
Speaking as a customer, I'd rephrase that to say customers must be persuaded to pay Apple's price. It puts the pressure back on the supplier where it belongs.
For the most part, I'm okay with Apple's pricing of their entire product lines (cover your ears Mr Cook
). The stainless steel and gold watches excepted.Speaking as a customer, I'd rephrase that to say customers must be persuaded to pay Apple's price. It puts the pressure back on the supplier where it belongs.
For the most part, I'm okay with Apple's pricing of their entire product lines (cover your ears Mr Cook
Agreed. Pricing on iPhones, Macs, iPads, etc. are perfectly fine but the Watch's pricing needs to be figured out to fit better in the lineup.
The stainless steel back of the iPod was a stamped sheet metal part- I.e. made from extremely cheap sheet stock in under 1 second + any finishing operations.
The stainless cases on the apple watch start from billets (or solid blocks) and are forged then milled to the final case, like almost all watch cases-- including the aluminum sport cases.
I would think the material cost on the steel is slightly higher... 50% at the maximum if it's an expensive alloy. But let that not fool you, it's likely still on the order of $3-4 per billet for aluminum and $5-6 for the steel.
I would think its the machining and finishing time that's significantly different and a price driver. Bead blasting and anodizing aluminum is likely significantly quicker than fully polishing steel.
Regardless-- these price drivers do not equal $200. Maybe a $20 delta at maximum.
Just like more memory on an iphone, or even the larger screen on the 6 plus, there is definitely way more profit margin as you scale the latter, which makes perfect sense for any product line, and makes investors like me quite happy.
The stainless cases on the apple watch start from billets (or solid blocks) and are forged then milled to the final case, like almost all watch cases-- including the aluminum sport cases.
I would think the material cost on the steel is slightly higher... 50% at the maximum if it's an expensive alloy. But let that not fool you, it's likely still on the order of $3-4 per billet for aluminum and $5-6 for the steel.
I would think its the machining and finishing time that's significantly different and a price driver. Bead blasting and anodizing aluminum is likely significantly quicker than fully polishing steel.
Regardless-- these price drivers do not equal $200. Maybe a $20 delta at maximum.
Just like more memory on an iphone, or even the larger screen on the 6 plus, there is definitely way more profit margin as you scale the latter, which makes perfect sense for any product line, and makes investors like me quite happy.
Cost of stainless steel vs aluminium is minimal, and the cost of tooling/machining is probably minimal between the 2 of them as well. A £180 price difference between the sport & ss models is not justifiable by simply using "additional cost to manufacture" as an argument. Probably costs Apple an extra £5-£10 to produce the SS over the Aluminium, not £180! That's what people are getting at here.
The fact that the complainers are here spending energy even discussing it is evidence that Apple is doing it right, from a business standpoint.
If Apple had way overpriced the stainless in comparison to the greater watch marketplace, we would have all just said "no thanks" and walked away. But the Watch is very appealing in many ways, and the SS is just plain nicer than the Sport. We don't like the added cost, but we can't ignore the appeal. Hence we begrudgingly make the purchase. And then over time forget about the money spent and start loving the watch. Apple wins.
If Apple had way overpriced the stainless in comparison to the greater watch marketplace, we would have all just said "no thanks" and walked away. But the Watch is very appealing in many ways, and the SS is just plain nicer than the Sport. We don't like the added cost, but we can't ignore the appeal. Hence we begrudgingly make the purchase. And then over time forget about the money spent and start loving the watch. Apple wins.
You all have it wrong and forget that a watch is a wearable accessory. When you enter the fashion world, it's not about the cost of materials. Why does a designer leather coat cost more than my leather couch? A higher cost for something you wear/drive. etc creates a higher sense of worth. Would it still feel like a premium watch if it cost $79, if that was closer to the cost of materials?
You can all debate costs all day but that is the fact. Stop looking at it as just a gadget.
You can all debate costs all day but that is the fact. Stop looking at it as just a gadget.
The edition only costs Apple in the realm of six or seven hundred dollars to make. Be happy the SS is only a $200 mark up instead of the 370% mark up on the edition.
(Source: http://www.businessinsider.com/profit-margin-mark-up-on-gold-apple-watch-edition-2015-3)
(Source: http://www.businessinsider.com/profit-margin-mark-up-on-gold-apple-watch-edition-2015-3)
It seems to me that Apple's pricing strategy is working perfectly. I would not be inclined to pay >$1200 for the full stainless watch and bracelet (including tax and AC+) but had no problem spending $740 for SS with sport band to see if this would work for me.
Now that I find the watch indispensable, (as indeed it is, for my purposes) I have no problem bringing the fit and finish of the package up to my minimum watch standards (as a longtime Omega wearer) by purchasing the stainless bracelet, which is reasonably priced for that type of bracelet. Bought it today.
If the next generation of watch happens to support the same bracelet attachment, that will be icing on the cake.
In addition, I will be happy to switch the band back to a sport version as needed, for example, in high-impact-potential activities, like the tactical carbine class I'm scheduled for in Arizona later this year, or for USPSA competition, sport bike track days, paragliding, and other "action" hobbies I participate in.
Now that I find the watch indispensable, (as indeed it is, for my purposes) I have no problem bringing the fit and finish of the package up to my minimum watch standards (as a longtime Omega wearer) by purchasing the stainless bracelet, which is reasonably priced for that type of bracelet. Bought it today.
If the next generation of watch happens to support the same bracelet attachment, that will be icing on the cake.
In addition, I will be happy to switch the band back to a sport version as needed, for example, in high-impact-potential activities, like the tactical carbine class I'm scheduled for in Arizona later this year, or for USPSA competition, sport bike track days, paragliding, and other "action" hobbies I participate in.