Why is the SS $200 more than the aluminum Sport?

Discussion in 'Apple Watch' started by Luba, Mar 15, 2015.

  1. Luba, Mar 15, 2015
    Last edited: Mar 15, 2015

    Luba macrumors 6502a

    Luba

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    Apr 22, 2009
    #1
    In other words, does having a sapphire display, a ceramic back, and being made of SS worth $200 more than the aluminum Sport? I don't know how much better sapphire is compared to Ion-X glass, ceramic over composite, or how much stronger SS is over aluminum. And whether it matters.

    I do think the SS looks better. :)
     
  2. maflynn Moderator

    maflynn

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    #2
    As you mention, the crystal is different. Sapphire is more expensive, the bands are pricier as well, and I think SS can be pricier.

    Finally, the best answer I can come up with, aside from those reasons - because they can.
     
  3. drewsof07 macrumors 68000

    drewsof07

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    #3
    Not sure it's a matter of "better", but Sapphire is much more costly to produce than regular glass, no matter which consonant ions or magic fairy dust they claim is in their glass composite.
    I'm surprised people aren't more upset about the $149 leather bands! You can buy an entire cow, meat and all, for about $2,000.
     
  4. Lennyvalentin macrumors 6502a

    Lennyvalentin

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    Apr 25, 2011
    #4
    The materials are (generally) more expensive, and public perception of said materials are that of a more expensive product.

    Interestingly enough, in most situations the perception is reversed... An aluminium bike is more expensive than a steel bike, and an aluminium car is more expensive than a steel car. :D
     
  5. kmj2318 macrumors 68000

    kmj2318

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    #5
    The market will decide.

    Personally, any more and it'd be too much. Any less would be an easy choice. It's right at the line where I can reasonably afford, but still have to justify to myself. Which I find normal for Apple's pricing.
     
  6. Cashmonee macrumors 6502a

    Cashmonee

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    #6
    Because they can. None of the materials warrant that large of a price increase. For reference, Garmin charges $100 more for the sapphire version of the fenix 3 and it comes with a rubber band and a metal band (that retails for $129). Not saying that is necessarily apples to apples, but it gives you an idea how much Apple is able to gouge it's customers.
     
  7. Luba thread starter macrumors 6502a

    Luba

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    Apr 22, 2009
    #7
    Excellent point! Somehow SS is considered the ideal watch material even though it's heavier than aluminum. Usually lightness is prized, but I guess the hardness of SS over aluminum is more important for watches?!



     
  8. KPOM macrumors G5

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    Oct 23, 2010
    #8
    The differences with bicycles and cars is that lighter weight is a feature (all else equal, it helps you go faster, and in the case of cars, use less fuel). With watches, the extra heft is insignificant in the grand scheme of things, but adds a premium "feel" since aluminum is more easily dented.
     
  9. TallManNY macrumors 68040

    TallManNY

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    Nov 5, 2007
    #9
    Short answer is perceived value and demand. I believe steel is cheaper than aluminum and easier to work with. The sapphire front might be more durable but I doubt it is anything more than a few dollars more expensive for Apple. So if you are comparing the rubber band versions of Sport and SS, no there isn't anything close to $200 in price difference. The SS has models with more expensive bands, but again, the markup for the watch is going to be more than the added cost of the band in every case and significantly in some.

    The SS version isn't quite a luxury item. But a middle class guy with a wife and couple of kids is going to have trouble buying the SS with link band, which very well might be the one that he wants to wear to work.

    Folks are focused on the Edition watch as being the really incredible luxury play for Apple. But really the SS is a departure from their normal business model.

    Apple has always made great margins on memory upgrades. What the media and wall street seems to have not entirely realized is that every price point on the Apple Watch scale is basically a similar margin increase as the memory option.

    I'm sure the sport watch has some nice margins built in. I think that every single price step upwards is an increase in margins. The Edition margins are obviously huge. But I bet the SS margins will be higher than any main product that Apple has ever introduced as well.
     
  10. Piggie macrumors 604

    Piggie

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    #10
    Who decided heavy = Premium ?

    Genuinely interested, as this must hard back to something very very old.

    If you had babies, never told them anything about this type of thing, I don't feel they would be mentally able to decide that a heavier item was in some way better.
    There is just as much chance that they would think. Well, I have to strap this to my body, carry it around all the time, so lighter and more unnoticeable would be better (more premium)

    I am guessing, but I can only think this harks back to very old industrial revolution mentality, when things were made from metal and durability was king, and metal cost a lot of money.

    If something was heavier, this much mean it used more metal, and more metal meant stronger, lasted longer, so weight was associated with a higher quality.

    If it was lighter, as they did not have any modern materials back then, even aluminium, light meant it was made from thin materials, so was going to be weaker, less durable, and hence cheaper.

    Heavy = premium quality = expensive.
    Light = lesser quality = cheap.

    We of course, know better now, and have a vast array of materials, and ways to use those materials in newer ways.

    This is all a guess, but I wonder if that is where this concept started.

    Of course, this means nothing now. You can make something cheap and heavy, or expensive and light.

    Many still have this thing from the past stuck in their brains, passed on my generations.
    To the point where people actually stick a lump of metal into something modern and light to make it heavier, simply so it feels better quality.

    Humans are very slow animals to change :)
     
  11. KPOM macrumors G5

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    #11
    Actually, in the 1880s aluminum was a "precious metal" since it was hard to produce, even though it is so abundant in the earth's crust. That said, part of the distinction is that precious metals such as gold and platinum are actually heavy elements. Iron (the main element in steel) is lighter, but still heavier and less malleable than aluminum (though it corrodes a lot more easily).
     
  12. iBreatheApple macrumors 68020

    iBreatheApple

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    #12
    Not that I have any experience whatsoever, but I'm assuming we often forget to take many other things into consideration. Perhaps the sapphire display yields less per "sheet" than the Ion-X glass. Not only might the yields be lower, but there could also be much more waste of the material (for whatever production reasons). Surely it will be the customers that eat this cost, not Apple. Again, this is just a theory with no background knowledge, my point is that it may not be the physical cost of the watch that is hiking the prices. Also, as others have mentioned, 'because they can'.
     
  13. Piggie macrumors 604

    Piggie

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    #13
    Oh yes.
    And I have said this before, and wish more could grasp this.....

    None of this is actually "Real" it's all made up junk in our minds.

    Gold could be worthless, tramps with gold watches, and on the cover of vogue a slim model showing off the new Edition Plastic apple watch.

    As we all knew, Plastic was so rare, and most people could not afford it.

    Either version of reality is equally valid and correct.

    The Plastic is Junk, Gold (or other metal) is luxury is a totally imaginary concept.

    Not quite the same, but take Global warming and the Ice Caps.
    If there were palm tree's on the artic and you went there to lay on the beach for your summer holiday, green vegetation everywhere.
    Then in recent years it had been getting colder and colder, the greenery was dying off due to the temperate dropping, and OMG the sea was starting to freeze up into giant areas of ice around the land mass, causing the oceans all around the world to start dropping.

    We'd all be like OMG, end of the world, we need to act now and save the planet, we are destroying a continent and causing ocean levels to drop due to us messing with nature.

    Either scenario is equally valid, and we'd jump up and down and get upset over either :)
     
  14. KPOM macrumors G5

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    #14
    Price and cost are two very different concepts. Items are priced based on what the market will bear. An item is profitable if the price is higher than the cost. "Cost plus" pricing models are common only for commodities and staples.
     
  15. Piggie macrumors 604

    Piggie

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    #15
    Oh trust me.

    "Because they can" is going to be the largest reason.

    I think many would be shaken to their very knee's if they knew how much most of this costs to make.

    Go look at watch bands on Ebay for a start, even fine chains in metal with many many hundreds of tiny loop's
     
  16. Southernboyj macrumors 68000

    Southernboyj

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    #16
    Im most upset about the $449 metal band :/

    It's my favorite band but jesus.. its hard to justify paying the price of an iPad for just a band.
     
  17. kerosene macrumors regular

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    Oct 13, 2008
    #17
    Spot on. Makes me think the Edition is perhaps a decoy for the real scandal, the pricing of the SS. So non-sensical when you think of the watch as a first gen unproven iPhone accessory. Costs more than some iPhones.
     
  18. KPOM macrumors G5

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    #18
    That's the world of watches for you.
     
  19. Piggie macrumors 604

    Piggie

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    #19
    Well, just wait for either a 3rd party strap, or, when they come out get the adaptors and fit a normal fit strap.
     
  20. kdarling macrumors demi-god

    kdarling

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    #20
    "Ion-X" is an Apple marketing name for a common type of ion-exchanged material, a popular example of which is Gorilla Glass.

    Gorilla Glass - The Ion Exchange - How Stuff Works

    Most likely, by using a generalized term like that, Apple can substitute whichever glass supplier they wish during production, without having to change any advertising info.

    So to answer your question: look up any past discussion of sapphire versus Gorilla Glass.
     
  21. TallManNY macrumors 68040

    TallManNY

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    #21
    Yep. You could feel the air come out of the room when Cook announced the SS prices. Very few people in that audience were expecting to buy the Edition. They were savvy enough to know that it was going to be at least $5,000.

    But many folks are interested in the SS as something they can wear to business meetings. The price points are really going to be tough for journalists and blogger to handle. It becomes increasingly hard for the middle class to justify when you consider that it might not last that long or that the value add of watches three years from now might basically force you to upgrade.
     
  22. kerosene macrumors regular

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    Oct 13, 2008
    #22
    I think Apple is becoming greedier and more opportunistic, both don't bode well for its future. They have had a shot at turning the watch market upside down but decided to play by its rules, instead of redefining them. Pricing would have played an important part in such a strategy - hey, we have something much better than a watch for your wristspace - it's as stylish as those things that are very limited in their usefulness - but will be much more useful and affordable. Time to ruff the feathers of this fat and lazy bird!

    Opportunity lost.
     
  23. Piggie macrumors 604

    Piggie

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    #23
    I think this is obvious.

    When you have an almost religious, some may say fanatical customer base, who you see will lap up almost anything you make, as long as you can come up the explanations why it's needed, it's going to end up this way.

    Apple throw millions into adverts and self promotion, the whole feel of the product is almost more than the product.

    They will get or are getting to the point where they can do almost anything and they know they will sell millions.

    I think we all know in the long run this will only end in tears.
    Just depends how long, and which product is going to be the turning point.
     
  24. kerosene macrumors regular

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    Oct 13, 2008
    #24
    I don't think it's that obvious to that many.

    When the first Macintosh came out, S.J. wanted to price it at something like $1500, but Sculley and the board insisted on $2500 because they felt they could. The decision cost them their dominance in the PC market.

    Imagine how they'd be doing if they had priced the Sport at $249, the SS with any band at $349 (no Edition, or just for charity). Don't think they'd have had to go hungry at those prices, and would probably have boosted iPhone sales at the same time.
     
  25. sjinsjca macrumors 68000

    sjinsjca

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    #25
    Could still happen. The original iPhone's price was cut $100 after a bit.

    Pricing isn't an exact science in any case... and I guarantee there'd be just as much hand-wringing and spitting if the intro price for the Sport had been $249. $349 gives them room to maneuver if demand is weak or if real competition emerges.

    The good news for shareholders is that Apple wins even if they have to borrow that price-drop page from the iPhone's script. But it's a profit-maximization game, hinging on whether the $100 price cut (and therefore profit cut) would result in larger winnings at the end than the $349 price at whatever reduced volume that price would bring. If $349 isn't a great price for Joe Sixpack, maybe that's part of the point.

    There's another benefit to an immoderate initial price: it tilts purchases to committed early-adopters, who are vital to the infancy of a groundbreaking new product.

    It's early days in any case, and a whole new category, and really quite amazing functionality for the price and package size. Just imagine what we'll be arguing about in five years!
     

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