There isn’t a month that goes by that I don’t try to bring this up with the doubters. Now that Apple is launching a new product category I would like to find as many people possible that think the Apple Watch will fail so I can go back in 5 years and serve crow.
Imagine if Apple had a Kickstarter to drum up demand for an Apple Watch. You would see a millions and millions of dollars coming in to draw interest. Making my point, the Apple Watch is coming and it will be a hit. The Apple Watch, the Apple Sport and the Apple Edition are the three types of watches Apple is releasing. The Apple Watch Edition is the watch that piques our interest.
Tech Crunch, was representative of early Apple Watch Edition expectations:
“A jewelry contact familiar with the matter told TechCrunch that the gold, 18-karat version of the Apple Watch could cost around $1,200 retail…”
The first report I read back in September ’14 that expectations of $1,200 were extremely low was Daring Fireball.
“In short: hundreds for Sport, a thousand for stainless steel, thousands for gold.
Most people think I’m joking when I say the gold ones are going to start at $5,000. I couldn’t be more serious. I made a friendly bet last week with a few friends on the starting price for the Edition models, and I bet on $9,999.”
After Gruber’s original analysis people’s are now expecting a luxury watch with the Edition model. It is now pretty difficult to find an argument out there that the Edition Watch will be less than $3,000.
These are the latest estimates. Going on record with his prediction, John Gruber writes:
“I now think Edition models will start around $10,000 — and, if my hunch is right about bands and bracelets, the upper range could go to $20,000. I was off by a factor of two…”
Analyst Piper Jaffray, via Apple Insider reports:
“On the high end, the analyst forecasts base model Apple Watch Edition devices to start at $4,999, but classifies segment ASP closer to $7,500 after adding in straps made from precious metals.”
Greg Koenig (@gak_pdx) tweeted:
“If anyone thinks Apple is charging less than $5k for the Edition, they are smoking crack. Based on the gold content alone, $5k easy.”
Ian Morris contributing for Forbes 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.”
The Koenig group said via Venture Beat:
“Koenig’s group believes the Edition-series Watches will be priced between $3,000 and $7,000, but no more. “Based on the fact that the product lifetime of the Apple Watch will be 1 to 3 years, any ‘reasonable’ buyer (and that is what Apple is looking for) would probably not spend more than this,” Koenig says.
After my findings I find it very hard to believe that Apple will sell a watch for $10,000. If in fact the cost just to make the Apple Watch Edition is around $1,200. I can see the starting retail price around $3,000. Which is more than what I would have originally guessed. A watch that costs the same as Apple’s 5K Retina iMac doesn’t seem like you are getting value.
I also agree, that I don’t understand the luxury market. It is a fact that people pay well over $20,000 for watches that are far less functional than the Apple Watch, but also expect the timepiece to last for time.
I can’t believe that, as far as hardware goes, that an Apple Watch in 5 years won’t be significantly better than the one that is 5 years old. Look at the iPhone. The shape is remarkably similar, but there are huge differences. So how can someone see the long term value in what they are buying.
In the world of self-help there is a triangle to make money. At the first tier you have a book for $20. Then you have a website with a monthly subscription for $10. Then you create audio books for $100, then you have a 3 day seminar for $900. After your seminar then you have a retreat for $1,000’s. Then you pay for a personal life coach for a higher monthly. Some see this as a rip off for the higher priced events, the ones who pay for it are glad that it exists. The reason why those exists aren’t because these self helpers are trying to squeeze every penny out of the “suckers”, but because the consumer wants more. Where there is demand, you should create supply.
The idea is that whether or not the vast majority of people you reach will pay for each tier is irrelevant, what is relevant is that there are enough people that are willing to. I believe the demand has existed for a while. Now Apple has a product that matches that demand.
Apple has the brand and the customers to make this work. There is no way that people are getting great value on watches that cost over $20,000, but enough people have bought into this notion. The luxury watch market exists and is thriving. This is how Apple can sell watches for $10,000. This is how Apple will sell watches for $10,000.