Can Apple disrupt the luxury watch industry with a $10,000 Apple Watch?

“As the Apple Watch was announced, three tiers were named: Apple Watch Sport, Apple Watch, and Apple Watch Edition. The prices for the Apple Watch Sport will start at $349, and nothing more was said,” Ewan Spence writes for Forbes. “”

“Given the materials suggested, the Apple Watch Sport with aluminium at $349 is a reasonable price. It’s the pricing for the second and third tier watches that are far too low. As John Gruber points out on Daring Fireball, the stainless steel watch with a sapphire screen could easily reach $1,000,” Spence writes. “If Apple releases a solid gold Apple Watch, the raw gold alone could cost a few thousand dollars. Apple traditionally looks for high margins with its products, so there’s no reason why the entry-level Apple Watch Edition, made with 18-karat gold, could command a starting retail price of $5,000, with further customisation options reaching $10,000.”

“Apple’s sports model of the Apple Watch, starting at $349, will be the watch that the tech circles pick up in vast numbers. I’ve no doubt that it will sell in significant numbers, become the world’s number one smartwatch, and the legends of Apple rewriting a category space will continue,” Spence writes. “But Tim Cook’s goal is much higher than that. It’s not just the reinvention of the smartwatch category, it is the disruption and potential domination of the luxury watch industry that Cook will seek to challenge during 2015.”

Read more in the full article here.

MacDailyNews Take: Hence the reason why, following the Apple Watch unveiling last week, Jean-Claude Biver has been making a continuous mess in his Depends.

Related articles:
Jean-Claude Biver: ‘The Apple Watch cannot compete at all with European watches’ – September 15, 2014
What the Apple Watch says about Apple – September 15, 2014
Tim Cook of Apple Watch battery life: ‘You’ll want to charge them every night’ – September 12, 2014
Old school watch makers don’t get Apple Watch – September 12, 2014
Apple Watch, the world’s first real smartwatch, will be a massive hit – September 9, 2014
Apple iWatch designer Jony Ive: Switzerland is in deep shit – September 4, 2014

40 Comments

  1. the Apple Watch will create its own playing field of new smartphone watch users for a total yearly sales revenue and profit of more than all the European luxury watch makers combined. Over time Apple will eat into luxury watch sales. Just ask Nokia.

  2. Apple does not seek to disrupt high-priced *anything* — they set out to create something that has meaning and purpose to the buyer.

    Why is it so hard to shift the analysis from what the writer wishes would happen to what drives Apple?

  3. I don’t know that Apple really wants to disrupt the luxury watch market. That’s a pretty limited market, and Apple is very much enjoying the money it makes selling high-end products like the iPhone and iPad. Notice Apple hasn’t gone into the luxury iPhone market, even though there are companies that will make a 100% gold iPhone for you. There just aren’t enough customers.

  4. Absolutely not. People buy a $100,000 Rolex knowing that it will work and be state of the art for decades. People will buy an Watch knowing that it will be obsolete in two years.

    Very soon, today’s Watch will look ludicrously bulky and be underpowered and have low battery life compared with whatever Apple releases in the next few years.

        1. I know, and I got your point and do not disagree. I was nit picking because Rolex is one of those brands whose value far exceeds the nature of their product. A Rolex is not state of the art in anything other than achieving maximum brand value.

  5. The watch is a nicely designed technological device but should only be bought at price levels that equal what a technology device like that should bring because it will be replaced at some point by the next improved model. Paying enormous sums of money for a device with only co$metic embelli$hment$ that has a relatively short shelf life and inevitably become obsolete is truly dumb. Only for people with serious money and sense to throw away.

  6. If they offer a service to replace the chip and battery and the watch is solid gold they can easily sell it between five and ten grand to 500,000 to 1,000,000 Apple/watch lovers. The other 49 million will go for the $350+ devices.

    1. The moment they started talking about a pure gold casing, I felt sure that there would be a trade-in scheme so that customers can later upgrade to the latest version.

      If you buy a Rolex, they recommend having it serviced every 4-5 years. Instead of paying for a service on an Apple watch, you could trade in and upgrade to a newer model. A friend of mine recently paid £460 ( $750 ) for a Rolex service in London. Trading in and upgrading an Apple watch might not work out all that much different to keeping a Rolex regularly serviced.

  7. I think it will take same shaking out. You can’t charge such high prices for a product that is reasonably only going to retain its cutting edge usefulness for a handful of years in the same way you can for a watch that will last as long as you look after it. At those levels a watch is basically a piece of jewellery that tells the time. Apple might be moving towards that, but something so high tech is going to look really dated comparatively when it stops being actively supported and updated. It’s going to be interesting if nothing else.

    1. Yep. People keep talking about a *solid* gold watch, when it is much more likely to “just” be gold plated. A little goes a long ways then. But there could certainly be that solid gold option, too.

    2. Spot price of 18K gold is around $30 a gram. . . the total weight of Motorola’s 360, including electronics and screen, is around 36 grams. The AppleWatch is smaller in dimensions, but gold is heavier than the base metal the M360, so we can estimate the gold in the AppleWatch after removing the sapphire crystal and works to be around 35 grams. The cost of the gold at spot prices is more likely to be around $1000.00. Add the internal works, sapphire screen, and fancy strap or bracelet, and base cost is probably $1500. Add a 40% markup, $1400 wholesale. 50% markup $2250. I didn’t include general expenses per watch, might be $200 for overhead, advertising, taxes, etc, My considered guess is the target price is $2500.

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