“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
Sure! It’ll be the special Red U2 Edition.
Hopefully, they will upload it to me for free 🙂
They can disrupt my morning constitutional with that price, but I don’t think it will disrupt much more.
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.
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?
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.
Absolutely not. People buy a $100,000 Rolex knowing that it will work and be state of the art for decades. People will buy an Watch knowing that it will be obsolete in two years.
Very soon, today’s Watch will look ludicrously bulky and be underpowered and have low battery life compared with whatever Apple releases in the next few years.
Well… it will still be a Rolex. Not sure Rolex is state of the art in that world.
That’s not really the point.
I know, and I got your point and do not disagree. I was nit picking because Rolex is one of those brands whose value far exceeds the nature of their product. A Rolex is not state of the art in anything other than achieving maximum brand value.
For state of the art in purely mechanical watches, look to Omega.
Rolex is more like Rolls Royse, meticulously build old tech.
Apple will include “LifeTime Upgrades” with the gold version. Every year, send it in, we’ll polish and cram new electronics into that baby.
Apple’s Watch –> Apple’ sWatch
The watch is a nicely designed technological device but should only be bought at price levels that equal what a technology device like that should bring because it will be replaced at some point by the next improved model. Paying enormous sums of money for a device with only co$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.
Yeah, basically the Vertu set.
Capitalism is at its best when parting a fool from his money. That money can be then put to use in a more productive manner.
Remember that Steve never kept a Mercedes for more than 6 months to get around the license plate requirement (funny, those quirks of the mega-rich).
The rich just ain’t like you and I – they have LOTS of money!
Try being one of the worlds most famous (and controversial) people for a while and see how quirky you get.
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.
Not only solid gold but also 2 carats diamonds as well.
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.
When they start making the watches thinner, it will also contain less gold.
People with big gold watches want BIG gold watches.
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.
A ounce of gold this morning is about $1235. If the Watch uses 18 carat gold then an ounce could be made to cover 3 or 4 watches. I just don’t think Gruber is anywhere near in his pricing opinion.
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.
…”cover 3 or 4 watches…”
The gold Watch case is solid gold, not plated.
Look up 18 carat gold. It’s 75% gold with alloys making up the rest.
Correct, but that’s not the same as gold plated, which will wear off over time.
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.
No
I will be happy if the sports version is the lowest price. Anymore and it probably would not be with it for me.
I think the Watch creates a new market for a device on the wrist that happens to tell time as one of it’s functions. I don’t think that is the primary function of the watch anymore than a microwave’s main function is to tell time. It will sell well, very very very well.
As to being disruptive to the luxury watch industry, I think it will take some sales away and actually add some sales. Change is inevitable in any industry but those in the market for a luxury watch will have to consider which parameters they are considering.
One of the parameters is time itself. Twenty, thirty, forty years from now:
– Will the Watch be running the latest operating system?
– Will the Watch battery still be running?
Twenty, thirty, forty years from now a Swiss luxury watch will be expected to be running. That’s the aim, to create (mechanical) eternity in a box.
Both occupy the wrist so there is definitely some overlap in the form and functionality but I suspect that they will find their own niches and both will continue to do exceptionally well. Where I to be in the market for a Christmas present, hey an Watch is a great idea. A graduation present for someone, hmmm I’d go for the luxury watch, it will be a longer reminder and its (focused) functionality will be intact.
Still the Watch will rock.
Actually, a free U2-branded Apple Watch Edition is being sent to everyone with an iTunes account as a special promotion.
A gold mechanical watch is an heirloom. A gold smart watch is outdated in months.
I sure hope Gruber’s wrong about the steel-sapphire one being $1K. No way I’d ever buy that, and the aluminum one doesn’t look very good. I have no interest in that. If these really are the prices, I’ll be waiting for the 2nd or 3rd gen models.
Sadly most people are confusing AppleWatch by considering it as a single version. Apple starts small but have 5 years ahead plans. Otherwise, why would they have hired all the well established researchers in the health monitoring field.
The Question is not how successful is this version of AppleWatch. The real question is “Is AppleWatch the basis for a new development platform that will excite developers and strengthen the Apple EcoSystem?”
Anyone who understand Apple will say: YES dammit, how stupid can you be to think otherwise.
The functionality of the $349.00 Apple watch and the functionality of the “$10,000.00” Apple watch are precisely the same, and not in the same way that the functionality of a $349.00 dumb watch and the functionality of a $10,000.00 dumb watch are. Wrap your mind around that.
With some digital watches the method of repair is to throw away the guts of it and just insert a new one into the old case.
Apple might be looking to do the same for one or two generations
As the bits inside are a few dollars they could offer that sort of obsolecence insurance for , say 3 or 4 years.
I don’t see any prospect for a $10,000 Apple Watch. The simple reason is that this product will date very, very, fast and will be worthless within a few years. A traditional watch, by comparison, can be handed down to the next generation – but who would want a non-functional and very dated Apple Watch unless you were a collector.
I don’t believe Apple will pursue the high end of the watch market – watches at this level are jewellery and are purchased with long-term ownership in mind.
If you compare the original iPhone to the new iPhone 6 you will get some idea how the Watch will evolve. Indeed, it is likely that the second iteration of the Apple watch, in a year’s time, will be significantly slimmer with significantly more functionality, and users will want to trade-up.
If you have to buy an Apple watch today, buy the least expensive option. It will be a brick within 3-4 years and you will be wanting to upgrade long before then.