Apple Watch Speculation

The Apple Watch event may only be a little over 24 hours away, but that still leaves us with plenty time for idle speculation.

Like Gruber, I think it’s a lot of fun to play the guessing game, but unlike him, I don’t think the Apple Watch is going to have the stratospheric price points Twitter has been counjouring up over the past few months.

At first, I really believed all the comments that the tech-press was was going to have a shit-fit over the pricing, when it was finally announced. That the solid gold versions were going to be priced like luxury watches from Rolex, and come in at $10,000 and above. But further thought has lead me to believe that this is all wrong, because Apple are just not Rolex, and you don’t become them simply by releasing an expensive watch. Ford can’t become Bentley just because they release a Focus with a fancier leather and wood interior.

Collectors of luxury watches are not simply buying them because they’re made of gold, they’re buying them because they’re made by companies with a long history of craftsmanship. Hand built mechanisms with finely tuned components that will last your lifetime and beyond, heirlooms for future generations, an investment as much as a timepiece. An Apple Watch, mass-produced in a Chinese factory does not meet that criteria, and wrapping it in a gold box does not change that. Even if that model is assembled in the USA, the comparison is still not the same, since the expensive model is just the cheap model in a different outer. Those with a real interest in watches will find the Apple Watch crass.

And, even if they didn’t, Apple are also woefully under-prepared for selling that luxury. A man of gentry does not buy his timepiece from a spotty kid standing next to another customer buying a pink iPhone case. I can certainly believe it possible that Apple could create a special carpeted back-room for the sole purpose of purchasing one of these theft-magnets, but it would feel so out of place with the rest of what they do it would almost feel tone-deaf to their customer base.

And that’s my main argument against the high pricing, Apple is not a luxury brand. In the tech world, it may have a reputation for high prices, but that’s because most of their competitors are racing towards the bottom of the market as they try and stay relevant. Their rivals often chosen cheapness as a USP rather than quality or invention. Instead, Apple is a brand of the people. It is an aspirational brand, no doubt, but it makes products for everyone, and even high end devices like a Macbook Pro with their useful life of five years or more can be seen as a good value proposition versus buying a new Cheapbook every 18 months because the hinges broke, or the battery failed, or Windows has become unusable. There are many who will argue against that fact, who will always see them as just an expensive brand for snobs, but their success over the past decade is based on their wide range of customers, like the families that fill their stores, all of whom recognise the inherent value of quality design and integration.

Gruber quotes the section from the Apple website discussing the manufacturing effort which goes into one of their bands as a sign that they have to be expensive. To me, that just reads like typical Apple marketing copy, no different from their single piece of aluminium in the Macbooks, or the way the glass bonds to the screen in the iPhone. It’s part of that same affordable luxury message, and what allows them to convince you that $349 and above is a good price for a smartwatch, rather than Pebble’s $99.

I simply don’t believe that there’s a market for selling $10,000 smartwatches. Sure, the Kanye Wests of the world would be the first to show off their gold edition, but Apple didn’t build their business on that kind of customer. That is not an aspirational price, that is a ridiculed price. And in a world where most people have given up wearing a watch completely (largely thanks to the iPhone), and most of whom did before were unlikely to spend more than a couple of hundred dollars on one, I’m not sure how much market there is for a $1000 one either.

Which is why I think the top end models, even gold, will be more like $2500. I expect that top end to be more like a Mac Pro than a Rolex.

In the middle, the Steel, is probably priced like an iPhone, ignoring the irony of an accessory costing more than the item it’s an accessory for. Somewhere in the $500-$600 range.

And then at the bottom, we know, $349.

All of these models will have a number of straps available which will no doubt push the price further. A gold link strap for the gold edition is probably another $500-$1000 on it’s own. But the base prices, I think they’re all going to be much more sane than we’ve been lead to believe.

At $349, with the option of paying $100-$150 more for a nice metal strap, I think that’s a nice business to be in, with the potential for selling a lot of watches as you drive the pricing down to closer to $199 or $249 in year 2 or 3. But I question how much life there is in even a $600 watch business, let alone a $1000 one. It simply doesn’t smell right.