Kevin Michaluk is Chief Media Officer of Mobile Nations and an expert in buying expensive consumer electronics. He's been known to spend over $1000 on Porsche Design BlackBerry handsets and upwards of $500 on clock apps. A watch enthusiast for most of his adult life, he's also pledged to buy an Apple Watch Edition as soon as it becomes available, and regardless of the price. This is his story.
Case in point, the prescient editorial I published nearly a year ago on iMore arguing Apple should release an expensive version of the then-rumored "iWatch". After stating my reasons why a high-priced Apple watch would make perfect sense, I finished the article with a flourish, saying "if Apple did release an expensive iWatch I'd be standing in line to buy one the day it goes on sale." Little did I know at the time that I was committing to spending thousands of dollars, sight unseen.
I took a ribbing for that editorial from a few of my colleagues (looking at you, Derek Kessler), but was ultimately vindicated when, several months later, Apple unveiled the Apple Watch Edition. With its 18k gold or rose gold casing, the Apple Watch Edition appeared to cross — nay, leap — way over the line from tech gadget into the world of luxury timepiece.
Putting a Price on Apple's Wrist Bling
We're still waiting to learn Apple's official pricing for the Apple Watch Edition, which will determine just how luxurious of a product it truly is. Following Klause Heine's definition of luxury, Luxury is anything that is desirable and more than necessary and ordinary. In non-textbook verbiage, the more expensive the Apple Watch Edition is, the more luxurious it will be perceived to be.
Since being unveiled, there has been plenty of speculation on the pricing of the gold Apple Watches. The first arguably-reputable estimate following Apple's September 2014 event pegged the price at $1200. A few days later, John Gruber of Daring Fireball said the Apple Watch Edition timepieces would more realistically start at $5,000 and he would put his bet on a $9,999 price tag. Even the most recent rumors in the Wall Street Journal, suggest a price tag over $4,000.
When it comes to retail price in the luxury watch industry, the manufacturer is completely in the driver seat. Apple can ultimately set the price for the Watch Edition at whatever the company chooses. Gold isn't cheap, so the material costs will be considerably more than the Watch and Watch Sport models. And if Apple eventually adds gold or rose gold bands as an option, the total price could go much higher.
In the traditional world of mechanical watches, simply upgrading from stainless steel to gold on the same watch casing can easily increase the price by $10,000 or more. Beyond the real increase in selling price due to more expensive materials and (likely) higher production costs, Apple could also choose to increase the margin they realize on the sale of each Watch Edition.
The Watch Edition is in a class of its own, and the individuals willing to shell out the cash for it will absorb any additional premium Apple may choose to put on it. When it comes to pricing luxury items, it's not about the value the product offers compared to other alternatives on the market. Rather, it's about desire and selling to one's emotions.
Functionally, there is no benefit to purchasing a gold Watch Edition model over the much less expensive Watch or Watch Sport. All three models will accomplish the same tasks on your wrist. That said, for all those out there, myself included, who have the Watch Edition on their "to buy" lists, this truth simply does not matter. It's like telling an aficionado of luxury mechanical timepieces to buy a quartz or digital watch because it tells time more accurately. When moving into the realm of luxury watch pricing, It's not about what the watch does for the owner. It's about what the watch means to the owner.
My Rationale for wanting a Super Expensive Apple Watch Edition
Personally, I'm hoping Gruber's initial prediction is on par with Apple's official Watch Edition pricing. A $10,000 (or even more expensive) Apple Edition Watch is an Apple watch I'll actually want to wear. And, strapped to my wrist at that price point, I hope it will give me the same emotional pleasure as the other traditional luxury watches I already own.
I've always loved watches, ever since I was a kid and received my first one from Santa Claus. Years later, in college, I made a hit list of all the watches I would love to buy for myself when I became successful. I have been fortunate to have now checked a few of those off the list. Today have a small collection of luxury watches that I wear regularly. I'm by no means a watch collector or watch snob — just a guy who loves watches and loves to wear them. There's a nice feeling associated with wearing a quality watch that you've purchased for yourself. It's a reward and badge of pride for working hard and smart, and a constant reminder to myself that time is precious and to always make the most of it.
As silly as it may sound, when I first heard the rumor that the gold Apple Watch may cost $1200, I was really disappointed seeing as how I had already committed to buying one. Smartwatch functionality be damned, at that price it would be hard to justify putting it on my wrist, because from a financial standpoint it would be such a downgrade from the mechanical watches I already own and love to wear. I'd rather pay more, even a lot more, for a watch I would actually want to wear.
Also, at a low price point, I feared there would be too many people out there opting to buy gold Apple watches. When it comes to smartphones, I don't care if the majority of people are using the same phone as me. A watch is very personal though, and if I'm going to spend a substantial amount on one, I'd rather not see it on somebody else's wrist every time I leave the house. The more expensive the Apple Watch Edition is, the more exclusive it should likely be.
Part of me does hope it's more reasonably priced (or that Apple puts in place some sort of a buyback/upgrade program)
As much as I'm willing to part with $10,000 (or more) to buy a gold Apple Watch, I'm not a person who likes to throw money away. And that's still my biggest fear with the Apple Watch Edition.
With a high price tag, Apple is positioning it as a luxury item, but I'm not sure that the appeal and value of a first generation Apple Watch will endure. With my current luxury watch collection, I love every watch as much today as the day I bought it. They're watches that I will still love and enjoy wearing five, ten, twenty or more years from now. They're timeless.
Because the technology of a mechanical watch isn't changing as rapidly at the technology in gadgets, I don't feel the need to upgrade my mechanical watches for fear of not having the latest and greatest. I'm completely content with owning the models I own, even for the long haul.
When it comes to tech products, I'm an early adopter who always wants to be running the latest and greatest. The Apple Watch Edition, despite being gold, is still a tech product. Tech gets dated. It serves its purpose for a year or two or three, then compared to the newer stuff on the market it begins to feel dated and ultimately becomes something you want to leave behind as you upgrade.
I don't think even a $10,000 Apple Watch can escape this fate.
This June I'm getting married. When it comes to the watch I'll wear on my wedding day, it likely won't be the Apple Watch. Looking back on the photos thirty years from now, it will look ancient. (I'll definitely take some photos wearing it though — I'm sure my kids or grandkids will get a kick out of it!).
If Apple extended the product lifecycle of the Apple Watch multiple years it could perhaps create a sense of timelessness around the product. If Apple made it more like a Mac Pro desktop where the body style doesn't get refreshed very often, as opposed to an iPhone that gets redesigned every two years, it could hold perceived value longer.
I don't think that will happen though. It's a first generation product and I'm sure Apple is learning a ton going through the development process. That's going to allow the company to make an even better second generation Apple Watch and sooner rather than later. Apple is no doubt already finalizing designs for the second generation of the Apple Watch, and working on the third and fourth too. The company can't be blamed for that. That's what they do.
At a high price point though, it would be nice if Apple came up with a solution for customers like me. Perhaps a trade-in program available to Watch Edition owners (think of it as a lease more than a purchase - every time there's a new model you can choose to give it back and get the new one or buy it out if you really want to). I just think it would be a shame to fork out that kind of money for an Apple Watch that two years from now will likely be collecting dust in drawer.
Either way, I'm buying it
I'm a man of my word, so whatever Apple prices the Watch Edition at I will be buying one. I'm sure it will get attention too as I wear it around. As a person who loves being a tech conversation-starter, the inevitable questions from strangers alone will make it a joy to own. The higher the price tag, I'm sure the more attention it will get.
That said, when it comes to watches, attention is actually the last thing I'm after (as a guy who was mugged in Paris last year for his watch, believe me when I say that). Rather, I'm chasing that enduring feeling of pride I get when I look down at my wrist and see something that truly brings me joy.
Will the Apple Watch offer me that? You'll have to stay tuned for my Apple Watch Edition Review.
I think you're bonkers, completely and utterly bonkers, but I have to admire the sentiment ! :)
I'm having a hard enough time swallowing the idea of $349, to be frank.
Agreed. I love how honest he is and not just with us but with himself. I'm sure a lot of people feel the same way. But no one dares to admit they want something out of pure desire. Sent from the iMore App
That's odd, you must not know much about watches. The cheapest quality Swiss made watch, and quartz no less, costs around $400+. And that only tells time and maybe date. I'm a watch guy and I'm telling you, $349 for a quality watch made of metal is nothing, especially for one that has a built in smart watch. That being said, there's no way the gold Edition will cost $10K. I don't even think it'll cost $5K. It'll cost a little more than the additional material cost increases will be. Rolex can double a $5K watch from steel to gold only because it's a GOLD ROLEX. As awesome as Apple is, it's not going to sway folks who can otherwise afford a gold Rolex to pay that much for an Apple Watch.
Unless Apple wants to sell almost no Editions, it'll have to be under $2000. This is my "watchguy" opinion. Reason is simple - if someone has $5K to blow on a watch, it's going to be a Swiss timepiece that will last for 50+ years and a potential family heirloom, not a throw away Chinese made electronic watch that will be dead in 3 years when the battery fails. So that person will buy the $500 Apple Watch, and a $4500 Swiss watch as a lifelong investment. Apple has to understand this buying psychology, I would think.
Smartest, most well thought comment on here. Posted via the iMore App for Android
Hmm, maybe not so much?
How often do you pay for service on your heirloom watch? How much do you pay?
I can't speak for JR, but as a watch aficionado myself, he's absolutely correct. Maintaining said heirloom is pennies/weeks over the duration of ownership. You'll not spend $10k over 75 years keeping a Rolex, Breitling, (enter your favorite premium mechanical piece here) up and 'running'. They're mechanical, they're made from resilient metals and internal components 'meant' to last centuries!
Absolutely, TLC Is indeed necessary over the term of ownership, but that's done by a professional time piece 'surgeon' and they're around! Third, fourth and fifth generation wristwatch mechanics are alive, well, and worldwide. I typically pay $120 every three years to have my Breitling and Rolex(s) serviced. I wear one of the three every day and I've enjoyed, like the author, watches my entire life. I've got the same dilemma I'm facing.
One consideration though ...as I've 'kept' an iPhone from each generation. The origninal (4GB which quickly went away). 3GS, 4 & 4s, and a plain Jain black '5' ...because I know they'll never make that color again, nor anodize/chamfer the metal for fear of ridiculous 'over' complaining about nicks. Mine's still got the plastic coverings and original box as it was a warranty replacement for an employee of mine I've found the original (with box- all wires, connectors and the 'base') are fetching decent collector cash
Same could be said if Apple Watch goes ape$hįt. Especially a rose/yellow gold 18k version! Price of gold seems to have steadied. But it's 4x the price it was ten years ago thru 25-30 (+/- $300/oz). The materials alone are going to maintain value and I can't see Apple doubling or even increasing the price of the gold itself --- possibly a 20-30% margin for the processing of the alloys to make the 18k stable, sturdy, and super resilient as gold is extremely malleable...the more pure, the softer the gold. In this case, literally, the 'bands" are supposedly interchangeable. If your desire down the road is to update to the third gen, you're only losing the value of the time piece itself (watch face). That WON'T be $10k. Maybe $1500-$2500 tops. It's the. And that hold the 'gold' if you will and the band that will determine the overall combination value of the watch you choose
We know you buy expensive stuff no matter what they are so is not surprise if you buy this watch.
Weak minded and easy to control at the retail counter. Apple counts on this every day.
Or intelligence, wisdom of the best made product on the market with the best post sale service in the industry, no bloat ware or carrier crap, phenomenal resale values...even after two years and fulfiment of contract. An eco system, app selection that's the BEST collective aggregation of applications in the history of programming! Phenomenal design, incredible horsepower (I've got the 6+ and Note 4 personal/business respectively) --- just amazing to me ½ the cores and ½ the speed with a ⅓ the RAM can 'play' Asphalt 8, Wheel of Fortune or edit my video more fluently and with MUCH better success on the iPhone than the Note
Definitely NOT 'weak minded and easily controlled' customers at their counter. Again, intelligent, smart and definitely NOT an Android geek with blinders on. Sorry but I take GREAT disrespect from your comment. It shows just how ignorant you are.
Easy to use GUI, fluent apps with incredible development support, hardware support available NOWHERE in the Industry and Hand's Down the BEST, most well BUILT phone you can buy. I've got a pair of 6+s. Wife and I. She's brutal on gear. Had em since November 2 and we've no 'bends' breaks or boogers. They're SCARY how phenomenal they really are. If you're too close minded to appreciate cellular technology from all angles you should it comment.
I'll tell you my take. Windows phone is set up to CRUSH Android really soon. New CEO is doing some incredible stuff and without the carrier and manufacturer bloat you get with .android (other than a boring, crappy Nexus), they'll too be proprietary, integrate and aggregate with its bigger brethren (Win 8.1/10) like iOS and OS X's continuity and 'Handoff' ....Android is 'down'. And unless Lollipop truly improves the 'tablet' development, scalability and SDK to make it work, I give it three years before the 'players' are Apple and Windows ...unless Sammy's 'Tizen' or whatever it's called becomes reality as they're the ONLY company in the world with the same type of leverage with carriers
Time will tell my friend but vertical and horizontal support and integration is becoming paramount and a Chromebook won't cut the mustard in a professional environment
I have to agree with OdyseeyDFX. I am a collector of watches and Honestly that is the only reason I would even buy a first generation Apple Watch at all. Spending $10k on an Apple Watch is just crazy. You know it will end up being like the iPad and iPhone. A new version every year is inevitable. It's not like a Rolex, Omega, Tag, Vacheron or Patek. Not even a Movado. It is an extension of you other iDevces. I may buy a first generation to add to my collection, just so I have the "First Edition" and that's it. If I do it isn't likely to get worn much at all. I wear a Submariner as my everyday watch.
thats probably the biggest reason to get it. It's a first generation.. The really smart people will buy it and never remove it from the box. Original, unopened, it will probably be worth the most after 10+ years. Certainly MORE than one paid for it. That said.. the next smartest move, if you have that kind of disposable cash, is to keep the original box, papers, etc... .. the first is by far the best option and an investment.. Remember: Apple II's in mint condition go for $25k on eBay.. BUT thats 15 years later, in mint, still functional condition.. I doubt in 10 years that a mint condition Apple Watch Edition would be worth LESS than $10k.. not when 15 years later the Apple II goes for $25k.
Think an original iPad or IPhone is selling for more than it's original price? Think again. I also think your info is a bit wrong as a mint A2S1 (the most expensive of the Apple II lines) goes for around 5k (not 25k). About the same as the MSRP (accounting for inflation).
That's because there are so many of them. If Apple only seeps around 1000 gold edition watches they will be rare and really valuable. However I believe that apple will sell to many to make it rare and valuable. Sent from the iMore App
You also have to take into account there aren't millions of them around. The watch will sell a lot and won't have near the value down the road.
We don't hate you, but thanks for letting us know you are a fool and that we can pretty much discount your opinion on rational things.
I assume you have owned and purchased nothing that isn't purely practical, then? Why do you have a computer, or smartphone, or tablet to read this article?
There's a difference between splurging for a product that delights you despite its high price, and splurging for a product because you're delighted by its high price.
Apple would be crazy to price a watch at that price that has the same functionality as the other Apple Watches. 10k for a watch with a gold face only? It definitely will be a conversation starter but not the kind you are thinking about. $349 is already to much for a watch that cannot fully operate on its own.
Nah, I hate you. And I think Apple should be taken to task if they do turn out to be that expensive. Let's look at the facts: - Apple charges more profit (has a higher margin) than anyone else. Their products are already 30% more expensive than they need to be simply because Apple is greedy. - The cost of the gold in the Apple Watch edition is somewhere south of $1000 by anyone's definition, and probably closer to $700. - The cost of the "regular" (steel) Apple watch is likely to be $500-$600. So make a wildly liberal guess and say that the Watch is a thousand and the gold is another thousand, let's even add a fancy wooden box like they say, a bunch of straps, and change Apple's over the top 40% profit margin, to a ridiculous 50% profit margin. The watch still ends up under $3000. A $10,000 Apple Watch would give Apple about a 400% profit margin. If you are okay with a company making 400% profit on every item sold, you are an idiot. That kind of profit is offensive. And Apple already has a rep for being elitist and their products being too expensive. Apple would be insane to charge those prices IMO. There will be backlash if they do.
The watch industry is bonkers, though. They have high end watches with low end movements in the mid 5 figure range. It has nothing to do with costs.
I would argue that you are buying the craftsmanship in those cases though. And the watches are basically jewelry, but men have to call them "watches" because they are embarrassed to buy jewelry. They have jewelled movements, and often have jewel encrustations as well. The Apple Watch edition on the other hand is exactly the same as the other Apple Watches, except it's made of gold. There are no jewels, it isn't made by hand, there isn't any "craftsmanship" in the same sense as a mechanical watch or a piece of jewelry. There is no reason for it to be over the top expensive, it has no cache, and Apple has very little in that department also. It's not like a Hermes bag or anything. It's just that Apple's C&C robot machine has carved a watch body out of a hunk of gold, instead of a hunk of steel. I fully expect them to be expensive and I fully expect Apple to (try) and claim "craftsmanship" and also to add a bunch on top "just because it's Apple" in an attempt to give themselves the same cache as a Hermes bag, but even so ... $3000 or $4000. Not $10000. $10,000 is obscene and uncalled for. Apple products have always been expensive, but the reason is supposedly good design and functionality. Despite their huge margins, we have always believed Apple products are expensive, but for "good" reasons. For Apple to release a product that's wildly expensive, not because of any functional design reasons, but just because they can get away with it is wrong. It goes against everything that good design stands for and everything they are trying to do in terms of "changing the world." It goes against the whole idea of producing good, well designed products that make people's lives better. In other words, it goes against everything Apple has stated in the past as their goals. If they do it, it means they have been lying to us all this time.
Rene, I am kinda on Gazoobee's side with this statement. Handcrafted high end watches don't have low end movements. Ok Invicta (I don't count them) has some pricey watches with lower end but not the ones I mentioned. Even the Tag's and Movado's aren't low end movements move up into Rolex, Patek and Vacheron and there is no way these are low end movements. I am most familiar with Rolex as I have several and my daily watch a Submariner Stainless has a case that is a single piece of machined stainless steel with a sapphire crystal. Each link in the bracelet is solid stainless steel as is the crown. The internals are hand crafted and put together jeweled movement. And as a collector of all sorts of watches I consider Rolex to be on the lower end of the high end.
Rene, this is true, but some of the estimates I've seen on the gold Apple watch's price seem to put even Rolex pricing to shame. A Rolex steel submariner date retails for $8500. It will retain its value over the years and will age gracefully due to its classic and timeless design. The 18k variant (including bracelet) retails for about $34K - 4X the price of the steel model despite the gold value coming nowhere near that amount. But again, it will hold its value and maintain its broad appeal over the years. The steel Apple Watch with steel bracelet is estimated by some to retail for about $1000, despite its identically featured aluminum cousin retailing for a third of that price. The Apple watch will start showing its age within three years and will be considered functionality obsolete beyond that point. Given all of the above, what is the rationale for pricing the gold Edition version at $10K (10X premium over steel) when even Rolex limits their gold over steel premium to 4X?
Yes, you are correct about the watch industry. However, "apple watch" is not part of that, not even close. Most true high end watch collectors aren't even thinking about an "Apple watch" lol.
"If you are okay with a company making 400% profit on every item sold, you are an idiot." What's with the name calling? I don't consider the manufacturer's cost when purchasing anything. If I determine the price of a product matches the utility that I will get out of it, I will purchase it: if I don't, I won't. The company can make whatever profit they can - it doesn't offend me at all. It's not like they are gouging people on necessities.
The "Apple is greedy" thing is childish and ignorant. Apple is a company beholden to shareholders and the bitch that is Wall Street. It's not a private company so it can't be greedy. There are profit expectations placed upon Apple and it sells things for what the market will buy them for. You think all the other companies are selling things for less profit by choice?? When you say Apple is greedy for making 30% profit, you imply they should willfully charge