“A man called Greg Koenig has had a think about what material costs are involved in the production of the gold Watch Edition are, and the results are somewhat startling,” Ian Morris writes for Forbes. “For a start, he estimates that there is 29.16g of gold in the frame. At today’s market value that’s about $1200 in gold alone. Apple may pay less, and as someone pointed out they may have a team of people buying gold when the value is lowest in a given trading period.”
“Even so, when you add in the cost of the electronics and the sapphire screen it’s quite unlikely that the Watch Edition will cost Apple less than $1500 to make,” Morris writes. “This gold version is a niche product, so the production costs will be higher as demand will be lower. Apple has also – it says – made the gold on its watch twice as hard as ‘regular’ gold. All of this points to a hefty eventual price point.”
“Koenig says in a follow-up tweet to his predicted gold content ‘If anyone thinks Apple is charging less than $5k for the Edition, they are smoking crack. Based on the gold content alone, $5k easy,'” Morris writes. “It is quite important that Apple gets the pricing right on the Watch Edition though, because reducing it later would be a really bad move from a perception point-of-view. I suspect that Apple will want to come in under $10,000 but at significantly more than $5,000. So my estimate is $8,000.”
Read more in the full article here.
Unless there is a guarantee to be able to update the electronics as new versions come out, buying a sold gold case is crazy.
There will be a trade-in/trade-up program.
Getting a new gold watch every year at a 75% discount would please the EDITION crowd better than would upgraded electronics. Probably even a 50% trade-in discount would please the majority.
Makes total sense !!!!
Or unless you are so rich you you do not care anyway.
The case is obviously not solid 24k or even 18k gold. It is a gold alloy with a lower karat. My guess is 10k. That is the only way to get gold twice as hard.
Mix the gold with other metals keeping at least 42% gold or 10k, but you have “harder” gold because of the metals you mixed with the gold.
Forbes has gotten to be such a rag. Wasn’t the original iPhone reduced in price? Didn’t buyers get a $50 Apple gift card?
Yes, I got $100.00 Apple Gift Card. There was no subsidy from ATT when they released the first iPhone in 2007. You had to pay full amount.
The overwhelming value in the original iPhone was in its utility. When Apple saw a volume opportunity, they went for it, at the expense of its value as a status symbol. People understand consumer products’ prices will decline (especially in electronics). Even still, Apple saw a backlash over its decision because the price for being an early adopter felt too high.
With a solid-gold Apple Watch, most of the value will be in its function as jewellery — its ability to telegraph wealth and taste as a status symbol. (Remember, if it’s just the functionality you’re after, you can always buy the sport model for $350.)
For a luxury product to convey status, it’s value must be established firmly in the public’s mind (even if that price seems irrationally high based purely on function or input costs). Lowering the price would introduce doubt about the value of the item.
The Economist has had some great coverage and insights into the unique properties of the luxury market:
http://www.economist.com/topics/luxury-goods
What is the actual gold content? And $8,000? That is plain loco. They might sell 2 if their lucky.
Even with its svelte design and precise bracelet the Apple Watch Edition edition could easily have $3,000 of gold in it. Many gold watches have a lot more than that in them.
Add in the cost of the guts, and add an appropriate margin and you’re firmly in that range.
The Apple web site does not show any Edition model with a metal bracelet, only elastomer or leather. That leaves the gold content entirely in the sides, button and crown. I think 29 grams is way too much.
Grubers analysis is Sport $350, Watch 4x that and Edition 4x the Watch price, more or less. I think that’s high for the series as shown. The watches, without a band, will be more closely priced. The price differentiation will be in the bands, and a gold link band would be heavy and expensive (and gorgeous). It would also be easily moved to an updated device, addressing one of the big issues of spending a lot of money on a watch.
Apple tends to go light and functional and this whole Rolex wannabe comes from the press, not Apple. OTOH, Gruber has contacts I don’t, so I might just be full of it.
A gold bracelet would make an awesome up-sell. Totally optional, but as you say absolutely gorgeous (at least in rose gold — the yellow gold will be tacky as hell).
Gruber wrote about this pricing months ago…
S T U P I D !!!
The “hardened gold” thing is what gets me. Most gold used in jewelry is 10k, 14k, 18k or 24k. The dominant gold in jewelry is 10k & 14k. 24k gold (the most expensive) is the softest. 10k (the least expensive) is the hardest. 10k gold has alloy added to harden it and make it more practical. 24k is more pure gold. From my limited knowledge, “expensive gold” and “hardened gold” are opposites. So…which gold are they using to calculate price? What gold are they assuming the watch will be made of? (FYI…my bet is that it will be 14k – best balance…durable, less alergenic, valuable but cost effective.
By the way, Rolex’s are 18k. Maybe the Apple Watch will parallel that at 18k. 24k, however, would not be considered “hardened”. This makes it less expensive than calculating the watch price at pure gold.
I read that Apple is using a special compression process (forging?) to make what ever karat gold they decide to use harder than it would be otherwise.
The karat spec of a gold alloy tells you little to nothing of what’s in a given gold alloy, just (roughly) how much of the total is gold.
Alloying metals can be copper, silver, nickel, zinc, palladium, aluminum, iron, and others, depending on the specific color and mechanical and electrical properties you’re looking for.
Beyond alloying additions, your can modify the mechanical properties of gold alloys further by heat treating, quenching or mechanical treatments.
Which gold alloy/treatment Apple is using they’re not saying.
Probably around $5000 dont forget this product is not aimed at the average Joe. Customer who but this watch will be the same people who buy Bentleys, Ferraris etc these are people who $5000 is pocket change and can afford to buy without asking how much.
http://www.apple.com/watch/apple-watch-edition/
“Each has a watch case crafted from 18-karat gold that our metallurgists have developed to be up to twice as hard as standard gold.”
There you go! Nice research.
I know I won’t be getting one, so whatever Apple wants to charge is no concern of mine. This is like any other product that is beyond my financial reach in a practical sense. I’ve never thought they should lower prices just for me to afford them. They are objects to strive for and I totally understand their exclusivity. If my AppleWatch Sport works the same as an AppleWatch Edition, I’ll be perfectly satisfied with the Sport version.
For $5k I am buying an IWC or Panera.
Gold is Best!!!
that one didn’t work…
Neither did that one