The $17000 gold watch seems like a concession;
You don't necessarily make $17000 gold smartwatches to make money from selling $17000 gold smartwatches.
You make $17000 gold smartwatches for this:
https://www.telegraph.co.uk/technol...ring-the-Apple-Watch-in-pictures.html?image=2
...and while I'm not going to assume that those celebs got their watches for free its not inconceivable that they did. It's called advertising. Hopefully, it sells $400 watches and up-sells people to $1000 watches. It gets the brand in the news and sells Macs and iPhones.
Now, if Apple ended up with warehouses full of $17k gold Editions because they thought they'd sell by the shedload then that's a different kind of stupid. You *want* a waiting list for your high-end luxury product to give it a veneer of exclusivity. However, you don't have to be very tech savvy to work out that your $17000 watch has the same innards as the $400 one and will be just as obsolete in 18 months' time and worth exactly as much as the scrap gold value (unless, of course, it comes with a certificate of provenance saying that it was worn by Beyonce - in which case it will hold its value for as long as anybody remembers who Beyonce is...)