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Why is the SS $200 more than the aluminum Sport?
- Thread starter Luba
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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.
My personal favorite from the current lineup is the Space Grey aluminum Sport model, though I'm not a fan of elastomer bands as they get sweaty. There will be third-party bands to choose from, though.
Aluminum has one big advantage over stainless steel: lighter weight. And I tend to wear watches for maybe five or seven years, and even sapphire can get nicked in that time, not to mention the watch body itself. The Space Grey Sport would be just fine for me, then. I'm in it for the functionality, not the fashion, anyway.
Titanium would be my ultimate: Tough, light-weight, nice-looking. (And it is the material of my current, sensor-festooned Casio Pathfinder PAW-1300T... which coincidentally cost close to what the Sport will cost). Of course, with the Casio the titanium on the body is a veneer on a plastic structure. They hold up well, but no one would accuse them of being haute couture. Its functionality is what has endeared it to me, especially its timezone support for my incessant traveling. I'm expecting the Watch will offer me even more, so it has my attention.
Though I did point out the massive margins I believe Apple is building into the SS Watch, I doubt it is a bad strategy. Remember Apple is not going for dominance in watch market by units sold. It will get that because the current smart watches are so bad. But Apple is going for profit dominance. And that means focusing on the part of the market that has the most money.
I don't think Apple wants its watches priced at approaching disposable amounts. So even the Sport watch is priced at a level where even middle class adults are going to notice it as a meaningful expenditure. The price makes the product important from the get go. That will make you use the product more (and it will limit purchases to folks who think they will use the product). The result will be word of mouth by Apple Watch owners that "yes, I use it all the time, it is great!" Which in turn will sell more watch (even at these higher price levels).
As a large adult guy who wears a suit to work, I'm basically looking at a MINIMUM $699 for 42mm SS with leather strap. I fear that the 38mm $349 Sport with rubber band strap is going to look like a toy strapped to my wrist. So I'm either (A) not getting the watch or (B) spending an additional $350 just to get a slightly bigger watch, SS material which is probably all told $20 more for Apple to make, and a band that maybe costs Apple $10 more than the rubber band. And since I might not want to jog with the leather band, I might end up buying the rubber band as well!
I think the watch is going to be really useful. So option (A) doesn't seem great. But man the margin on option (B) is going to be crazy.
It's more than that.
Bikes contain welded structures. Welding aluminum is challenging and costly compared to welding steel, and care must be taken to prevent the structure from spontaneously fracturing after a period of use. By comparison, any kid with a B in high school shop can weld steel. (EDIT: Welding it well is another matter, I hasten to add before a posse of professional welders comes after me with their blowtorches!)
Machining is the opposite. It's much faster (and therefore cheaper) to machine aluminum, and easier on the tooling. Aluminum is a dream to mill and form. I'm not the only one to think so: read Slocum's "Precision Machine Design" and you'll find that aluminum is really quite a wonderful material in all sorts of ways that run very deep.
Other manufacturing steps such as polishing, bead-blasting and so forth are also easier/faster with aluminum. Then you just pickle the thing in an anodizing bath and voila: a hard, scratch resistant surface (sapphire, actually) in your choice of colors. All told, you can probably mint a dozen aluminum cases with the time and effort expended to manufacture a single stainless steel case.
But $200 cheaper? Of course not. The incremental cost of working stainless steel necessitates proportionally incremental profit; that's just how business works. As a wild guess, I'd wager that the incremental cost is about $50 and the rest is incremental margin, in line with or maybe just slightly above Apple's traditional gross-margin targets.
And if consumers will pay for the stainless steel Apple Watch what they'd pay for a nice stainless steel Citizen or Seiko, what's the problem? I don't see Citizen or Seiko wearers being derided as mindless fanbois being led by the nose...
(Oh, and the extra heft of a SS watch is anything but insignificant to many consumers. It's actually a major drawback for SS.)
I've had bunches of Casios over the years, most of which were G-shocks. I've always enjoyed the nice, heavy feel of a fat watch on my wrist, but Casio case (and strap) designs are often very busy, with unnecessary ridges and grooves and so on, lots of text labels and such. It got on my nerves in later years.
Apple Watch will be perfect for me. It has friggin none of that, while retaining the sensation of a nice lump of a watch on my wrist.
I've had bunches of Casios over the years, most of which were G-shocks. I've always enjoyed the nice, heavy feel of a fat watch on my wrist, but Casio case (and strap) designs are often very busy, with unnecessary ridges and grooves and so on, lots of text labels and such. It got on my nerves in later years.
Apple Watch will be perfect for me. It has friggin none of that, while retaining the sensation of a nice lump of a watch on my wrist.
Agreed on all points! Except maybe the sensation of a nice lump. I'm not a fan of hefty watches.
I love the functionality, toughness, and infinite battery life of my solar-powered Casio, but really now: Somebody please put some decaf in Casio's break room...
And the user interface!! I actually have a .pdf of my watch's manual on my laptop so I can always find how to toggle Daylight Savings Time.
But speaking of Apple (-related) watches, can we all agree that Steve Wozniak wears the coolest watch of all time? http://www.cathodecorner.com/nixiewatch/ ...Unfortunately it's the size of a can of tuna and probably weighs about as much. Fortunately, on cuddly Woz it looks positively diminutive.
EDIT: One more thing. One problem with Casios (and most Seikos, Citizens and so on) is that when the band is done, finding good replacements can be difficult and expensive if it's possible at all. I hate retiring perfectly good watches because of band cost or unavailability. Fortunately, that appears to not be a problem for the Apple Watch.
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I'm afraid you are wrong on both points. High quality stainless steel is more expensive than aluminum and Stainless steel is much harder to work with than aluminum.
There's a lot in the world I don't know about, but I was a machinist for many years and do know what I'm talking about when it comes to stainless steel vs aluminum.
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I looked into it and you seem to be right. But I doubt the cost difference between either devices is material at this price point.
Though another one of or commentators said:
Machining is the opposite. It's much faster (and therefore cheaper) to machine aluminum, and easier on the tooling. Aluminum is a dream to mill and form. I'm not the only one to think so: read Slocum's "Precision Machine Design" and you'll find that aluminum is really quite a wonderful material in all sorts of ways that run very deep.
So maybe there is a bit of debate between the pros and cons of the material.
I will defer to others who have more experience. I have no relevant experience here.
Yes, but some of us WANT the heft of the SS. I think it probably weighs less than my Seiko SS with Link.
I agree that the cost difference between SS and aluminum would be minimal. They are certainly charging a premium for the SS version.
Why is everyone acting like the stainless steel is the only difference between the models? Stainless steel, sapphire screen, ceramic sensor plate. All of those things are more expensive to put together into a watch than their sport version equivalents. Hence the price hike. I've seen like three threads on this subject, and for the life of me cannot understand why this is such a difficult question for anyone.
I'm that other commentator. In my work I've been responsible for products (not watches though) that were available in precision-machined aluminum or stainless steel.
The material cost differences are insignificant, and they vary with the specific alloys chosen. It's the machining and finishing that is significantly more costly for stainless steel. If welding were involved, it would be a different story, as aluminum welding is a specialized, complicated and costly process.
So the $200 difference is due to the labor of working with SS, sapphire front, and ceramic back? Plus maybe a $50 markup because Apple considered moving to SS an upgrade?
Sure, and why not? Folks will pay it, just as they pay about the same amount of money for a nice stainless steel Seiko, Tissot, Citizen or top-shelf Casio instead of a bargain Timex or Armitron. The Apple Watch absolutely blitzes them all in terms of functionality and usability. And for those wanting to spend less money, there's the Sport models. But just as Apple doesn't play in the cheap/crappy netbook market, they're choosing not to play in the Timex/Armitron price category. I really don't see what's all so shocking and controversial about this strategy; it's a very Apple one.
Earlier I guesstimated that the cost difference between the two models (Aluminum + glass versus SS + sapphire and ceramic back) is maybe $35-50. Multiply that cost increment by Apple's usual gross margin and... yah, it all hangs together and explains the price differential. But there will be those who look at the numbers and insist it's larcenous for Apple to sell a watch that costs $35 more to make for anything over a $35 premium. That's not how business works.
I don't think so. My educated guess is that the SS version (with its sapphire front and ceramic back) costs perhaps $35-50 more to make than the aluminum version.
Scale that guesstimated amount by Apple's typical gross margin, and you have your $200, pretty much.
Thanks for the info.
In your guess is the cost of the machining of such a small item as a watch going to be meaningful when we are talking about a $200 price difference?
My guess is the margins are much better for the SS watch. Maybe the cost of construction increases by $50 total. The other $150 is pure extra profit for Apple. Then the other bands add even more profit.
But I have no idea if the $50 guess is right.
No, a $150 markup because that's in line with their customary margin targets... a little above, in fact, which gives them room to maneuver as the market evolves.
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No one except a few folks at Apple know the complete cost roll-up. But a $35-50 increment is IMHO a reasonable guess.
The rest, as you say, is profit. I have no problem with that. If there were no profit involved in the SS upgrade, there would be no incentive for Apple to develop and offer it.
Polished stainless steel costs more to manufacturer than the aluminum cases, in particular the Space Black SS with the DLC coating and the cost of sapphire for the face is significantly higher than the ion glass in the aluminum models. Do those things add up to more than $200 more? No, but they do add up and then you pay a "luxury premium" on top to get them. Not sure if I would call it fair but Apple puts choices out there and we make those choices...
