Apple Watch: Outrageous prices? Not a chance

“A lot has been said of Apple Watch, and what ‘starting at $350’ really means,” Mark Reschke writes for TGAAP. “True enough, the heavier entry level model will represent the base price, but claims of Apple charging up to $10,000 for the gold edition is outrageous.”

“Apple has never had any intention to price themselves out of any market for any reason,” Reschke writes. “Apple does support niche markets. The graphics and video customer are a prime example of low volume, specific needs users, but Apple caters to these customers because it is part of the core of who they are. Lose touch with those users and Apple loses its soul. Apple Watch has nothing to do with niche.”

“I’ve said it before, because it can not be any clearer: Apple Pay is the biggest breakthrough product from Apple since the original iPhone. The fact Apple Watch has Apple Pay built-in speaks volumes,” Reschke writes. “Every intention Apple has put forth for the watch is to sell them in substantial quantities.”

Read more in the full article here.

MacDailyNews Take: A very expensive $5,000+ solid 18-karat gold and sapphire crystal Apple Watch Edition does not preclude mass adoption when the entry-level Apple Watch starts at just $349. As with the Mac Pro vs. the Mac mini, there is a model for every price range, from mass market to aspirational.

Related articles:
Will you pay $4000 or more for the 18-karat gold Apple Watch Edition? – November 5, 2014
Pricing for stainless steel Apple Watch and 18-karat gold Apple Watch Edition leaked – November 5, 2014
Analysts on why Apple Watch is delayed until spring: Supply constraints, sales strategies – November 4, 2014
Leaked internal video reveals Apple Watch will not be available until spring – November 3, 2014

22 Comments

  1. Horace Dediu on his Critical Path podcast argued that the gold Watch might be more expensive because 1)they’re not expecting to sell a lot of them 2)the people that can afford it are willing to pay the higher price because they want to show off their affluence. The media is fixated on the gold watch but that will probably be 2% of Watch sales, maybe 5% at most.

    1. Well, it might be more expensive because the case is going to be made out of 18 Karat Gold. . . not 10 K, not 14 K. At the spot market, assuming that the watch weighs about as much as the Samsung or the Motorola, then the gold content may be as much as 35 Grams. That alone would come to about $2000 in gold value before we talk about workmanship to make the case, or the electronics that go in it, or the sapphire bezel.

  2. Provided you can swap the innards of the Apple Watch, the gold watch might be viable. It would really suck dropping 4 grand and having to replace it with a new model a year later.

    1. Apple hardware has been trending away from replaceable parts over the years, in the name reducing size and weight, and I don’t expect Apple Watch to change that.

      More likely, I could see Apple offering a good buyback deal on old Apple Watches when new ones are released. Existing customer gets a brand Apple Watch for a fraction of the price, and Apple gets parts to reuse and recycle into new devices

    2. I would expect there to be a program, like the iPhone repurchase program Apple has now, to buy an older Watch when you buy a new one. In any event, it’s not like you couldn’t sell it just for the value of the gold, which likely will go up in 1-2 years anyway.

    1. “I think there is a world market for about five computers” —Remark attributed to Thomas J. Watson (Chairman of the Board of International Business Machines), 1943—most likely apocryphal.

    2. By-the-way, I speak as a man who wears a Stührling Limited Edition Tourbilion Meteorite Wristwatch in Rose Gold with an Alligator leather watch which retails for over $3,000. I know several people who wear watches that retail for much higher than that. . . my main client wears one that cost him around $10K . . . and it’s just Titanium. I think the basic day date Oyster Rolexes in Stainless Steel at $7K and up are a waste of money. . . but that’s just me.

    3. you need to get out more, or, at least vary your reading material. in the latest architectural digest, under their ‘discoveries’ section, they feature a sky watch, 18K gold rolex for a mere $48,850.00

  3. The problem with an expensive Apple watch..it will be 18K of solid obsolescence in a few years because Apple watch 2,3..will be out. Then iOS 11 or whatever won’t work on it because it’s too old.

    1. That is probably true. Apple has not discussed any plans to provide an upgrade path for the Apple Watch. Besides, Apple will undoubtedly refine the guts over time to shrink the electronics, reduce the thickness of the outer case, improve the display and battery, etc.

      Some company (probably not Apple) might develop an adapter to swap out old AW guts for new AW guts. But that would be like transferring iPod nano guts into an iPod Classic. It might be possible, but you would still be carrying an iPod Classic with an old display.

      It is also possible that the initial version of the gold AW will become a valuable collectors item if it does not sell well.

    2. I don’t thin that’s correct at all. While new versions will certainly come out, it doesn’t mean the older versions have to become obsolete. After all, most of the heavy lifting for Watch apps are done by the iPhone. It is very easy to simply have the iPhone do all of the hard number crunching while the Watch just collects data.

  4. Reschke is a fool that doesn’t understand aspirational. I agree with Dediu’s prediction. People with money will not care if they spend $10, 20k on a watch. It is a status symbol everyone! In fact, the more expensive they are, the more desirable. This is why smuggled iPhone 6 sold up to 4 times their retail in China. I’ll bet these gold watches will sell like hot potatoes there regardless of the price point. Also, watch collectors easily spare $10k+ on a watch. This is also a product people can own multiples of- Sports edition for day to day, gym, etc., the stainless steel version for work, and gold version for dinner parties. I can really see that happening because most watch wearers own multiple watches. Other than Dediu, most analysts are severely underestimating the potential.

  5. The problem is going to be the scammers that take cheap versions and plate them and sell them as gold. Having seen programmes on TV showing complete fake Apple stores in China I will be buying mine online.

    1. Just know your source. Don’t buy an Watch from someone you don’t know is an Authorized Apple Reseller. And if you’re that concerned, then buy directly from Apple.

      And there will be plenty of companies out there which will gold plate your Watch, just like they do for iPhones. They’re legitimate companies who provide a service some people are willing to pay for, but there probably will be less demand since you can just buy a gold Watch.

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