Would you pay thousands of extra dollars for an Apple gadget made of gold?
Perhaps not, but the company is betting that at least some people will. Its Apple Watch Edition is made from 18-karat gold and will likely be very expensive – think thousands of dollars expensive – despite offering little to no extra functionality over the aluminum and steel models. Who would pay for such a thing?
Well, just ask Vertu.
Somehow, I don’t think many people are going to pay thousands and thousands of dollars for a watch, only to realise that everybody and their dog has the exact same one for 350 dollars. But hey, what do I know – I’m not rich.
OK, first, I know it is going to be flawed but it will have some valid arguments somehow.
If you live on USA or anywhere besides Germany (hint, Autobans) what improvements a more powerful engine will bring to your drive experience? You are limited to less than 75 mph on about +95 % of all faster lanes and any new engine is totally able to handle this with easy (I know there are places where it goes up to 85, but it is irrelevant as most new engines cope with that as easily). So why buy a more expensive one that also will consume more gas? Why pay for a more luxurious interior, better finishing or anything not strictly needed?
Simply answer: because people see value on things we don’t, some even ridiculous to our eyes, and because they can. No matter how stupid it may look to us, people will find a reason/feeling to back the buying decision. End of story.
I find myself reminded of a saying. “people talk horsepower and drive torque”.
Yes, top speed is nice. But more often than not most utility comes from the weight that the torque allows you to move around.
True but you don’t want do drive a tractor on a fast lane do you? 😉
Just get a manual. You can move 2x as much with the same horsepower because the stick shift controls the torque to top-speed ratio when you change gears, and the clutz can serve as an emergency intermediate gear (just don’t do it for long, since driving with a partially engaged clutch wears it down).
You buy a better car for the better ride. A more powerful engine not only increases your speed, but your acceleration. Acceleration is important if you want to go from 0 at a red light to your speed limit.
In addition you get other benefits, that a gold Apple Watch makes less sense. Maybe it will not fade as fast… but I doubt.
PS: Not only Germany has high speed motorways. Many European countries have speed limits that are 80mph/140kph up-to the full 100mph/160kph.
“the exact same one”
Can you give us a link on this $350 18k solid rose gold watch?
Can the guy who down voted me here put a link on the $350 gold watch too? Thanks.
Nope, but i can leave you with a few other (potentially) interesting links.
https://en.wikipedia.org/wiki/Veblen_good
https://en.wikipedia.org/wiki/Giffen_good
The lower price is in essence about the direct utility (calls, texts, data) can be had for a much lower cost, if you throw out the apparent appeal of conspicuous consumption…
Of course some people will pay that much for a watch, just like some people pay hundreds or thousands for a handbag that probably cost $10 to make in some 3rd world sweatshop. There’s no accounting for stupid.
Or to use that oft spoken, in Linux terms,
Choice.
The majority of us have a choice as to what clothes we buy, what food we eat, where we go on vacation. So why not extend it to a Watch? After all Swatch and Brietling exist together do they?
We don’t live under Stalin (or do we?)
Were you under the impression I was suggesting we should pass laws against conspicuous consumption? It’s your money – waste it however you want.
Breitling is owned by Swatch.
….there’s a sucker born every minute.
Come on, people pay thousands and thousands of dollars for things like handbags and wristwatches so obviously there’s a market for this.
You could say the same thing about almost any luxury premium brand. Chanel and Hermes hand bags are just functionally leather bags just like the cheapest ones you can buy in a street market, and yet a high end Hermes bag costs $120,000. The point about high price points is not that lots are sold (although I think more will sold than you expect) but that the existence of such a high end drags the whole product line and brand up market. I expect high end Apple Watch models to do very well in China, and the Chinese luxury goods market is now over half the global luxury good market.
I think the whole tech commentariat will be utterly bemused and confused by the Apple Watch. Understanding how tech will work when it stops being ‘tech’ and just blends into everything will mean leaving behind ways of thinking that have dominated tech discourse for decades (market share, platform, specs, performance etc) and require seriously using and understanding concepts that will make many techies very uncomfortable (fashion, style, veblen goods, etc).
Techies are already very confused today regarding Apple products.
Understanding why Apple is so successful with its $800 iPhone is well beyond the capabilities of most of them apparently. And they conclude that Apple users must be idiots because it seems also beyond their capabilities to conclude that there is a market for tech products outside their spec sheet/low price mantra.
So, indeed, the new way to market the Apple Watch as a fashion accessory will make them crazy. Expect more articles like this one soon on tech web sites. And expect more and more “idiots” to purchase the Apple Watch.
This is entirely besides the point. When you buy a $120000 bag from that brand, you can assure yourself you won’t run into some peasant with the exact same brand bag with the exact same design, just a different material. With the Apple Watch, however, every peasant can buy the same watch, at a fraction of the price.
Take my favourite watch brand – Panerai. Hand-crafted, limited edition stuff, many of which are only sold on invitation. If you buy a Panerai for $20000, you can be sure you won’t find someone with a $350 Panerai that looks identical but is made out of aluminium instead of whatever material the $20000 identical model is made out of.
This is where the fatal flaw lies in your luxury argument. The Apple Watch is NOT in the same league as the bag you mentioned – because every man and their dog can buy one.
Edited 2014-12-15 19:07 UTC
Apparently you also completely miss the point: the supposedly $5000 Apple Watch will be the solid rose gold watch. The price of the gold itself justify for a good portion of this price and nobody will find any gold watch for much less, whether it is an Apple Watch or a Rolex.
” The Apple Watch is NOT in the same league as the bag you mentioned”
Andt it price is not in the same league either: we are talking about a (rumored) $3000-$5000 Apple Watch which is not in the same league as a $50000-$100000 luxury watches.
Edited 2014-12-15 19:52 UTC
Except the high Apple Watch Edition, the one that will sell for possibly thousands of dollars, is made of gold.
Plus of course almost every high end item like the $120000 bag is available as much, much cheaper, and often very well done, counterfeits. And yet no one who might consider buying a $120000 bag would ever consider buying an exact clone counterfeit version because it was cheaper.
The proof of all this will be what happens when the Apple Watch actually ships and we can see how it develops as a brand, and whether higher end models sell in interesting numbers. Clearly Apple have put enormous effort into trying to create a fashion brand with the Apple Watch, including hiring some very top people from the fashion world. I think they will probably succeed but nothing is guaranteed so the next year or two is going to be very interesting.
I will say it again. I think the high gold Apple Watch will sell very well in China.
But its not the same watch, its made of solid gold. Its not like solid gold has the same cost as aluminum – they are charging for the material.
Cubic Zirconium and Moissanite exist, are virtually indistinguishable from the real diamonds, and are substantially cheaper. Yet people still buy real diamonds all the time, and they routinely run into peasants with CZ or Moissanite jewelry that often is larger and probably even looks better than theirs. Those same peasants probably think said person is stupid for buying real diamonds…
The point is people don’t buy high dollar diamond jewelry to distinguish themselves from “peasants”, only peasants think that
Do a google search for “fake Panerai watch” and you will see just how completely wrong you are… Those are the Panerais that the peasants who care what other people think buy
Edited 2014-12-17 05:15 UTC
I don’t think that you ever had an expensive bag. It’s all about the quality. Some brands are not as good, but drive value by being on the cutting edge of fashion.
A gold Swiss watch will last years and will not tarnish. Maybe Apple Watch will do the same…
Only you would even intimate that somehow Apple’s 18k gold tarnishes when other 18k gold does not.
There is a quote I’ve heard, perhaps authentic, but paraphrased here, from someone at Rolex: “We’re not in the watch business, we’re in the luxury business”.
Timekeeping is as solved problem at the consumer level. A modern, analog wristwatch is borderline disposable since the cost to replace the battery approaches the cost of replacing the watch.
A friend has a Rolex, paid silly amounts of money for it. And they recommend you have it “serviced” regulary (every couple years or something), for even more dollars.
The device actually keeps time as well.
People who buy Rolexes are not buying a watch. They’re buying an expensive watch. They’re buying an expensive watch because they want an expensive watch.
Men, notably, even today, do not wear much jewelry. It’s rare to see a man with rings, earrings, necklace, bracelets, broaches, and all of the other such things that encompass the domain of jewelry. The jewelry market is dominated by women.
The watch is one of the few devices men can use to express themselves, to broadcast status, etc.
So, there is certainly a market for “luxury” watches.
If someone wants a expensive Apple watch, then good on them. “Boy, that watch sure is ugly!” “Yea, and it’s expensive too!” “Yea!”
Apple screwed up on this one. I’ve been doing IT support in a jewellery store for about a year and a half. I asked the staff about the Apple watch. Everyone agreed it is a terrible idea. They’ve made a square faced watch which is almost always a ladies watch. They’ve missed most of the cues that would make it a successful watch. Universally people agreed that the Moto360 was a better watch for someone buying jewellery, it’s more of a men’s watch with a traditional large round face, but even that watch kind of misses the point.
Watches are a display of power. You spend $20,000 for the precision engineering, the exclusivity etc. Some people collect them like rare coins. Some watches are released purely as rare concepts like concept cars.
For instance, the Grand Seiko watch costs $20,000. It is entirely made by hand, one of the only watches in the world that still is. Everyone else is using lasers to cut the face/backing etc. But Seiko are still hand cutting the body of the watch. It’s the craftsmanship and expertise that you’re buying when you pay for a super high-end watch.
Edited 2014-12-15 18:45 UTC
Anyone who spends thousands of dollars on an Apple watch needs his or her head examined! Enough said!
A couple of points:
1. Thom claims there won’t be “many”. I can only imagine this “not many” is relative only to the biggest Apple successes but that anyone else would die for this “not many”. Tom loves to pat tiny, relatively unsuccessful projects that achieve barely viable status for a couple of years before quietly fading away and he calls them a success. (Wow! Jolla raised $380,000 to crowd source a tablet — Yippee! What is that, about 1,000 tablets?! So is the threshold for “many” a thousand units? Because if so, do you think anyone —even someone convinced the Apple Watch or even the entire category of smart watches is going to be a complete and utter failure — is willing to step up and claim Apple can’t sell 1,000 Editions?)
2. Thom claims “thousands and thousands” of dollars with absolutely zero basis. 30 grams (likely well more than the Apple Watch will be) of 18k gold is about $800. It could well be that the price of the Edition is in the $1000-1200 range. Sure, it could be as high as $3000-5000 in the end (with the various bands, etc) but it’s not getting us into $20,000 luxury watch territory or, very likely, even into $10,000 Vertu phone territory. None of us knows how Apple will finally price the various models, the various bands, what services they will provide, what shopping experience they will unveil, etc.
3. I can’t see any credible logic or intelligence to the argument that no one will but a $3000 watch when a $350 watch has the same functionality because no one buys $20,000 watches unless they are unique snowflakes. $20,000 watches aren’t unique snowflakes and they don’t offer any additional functionality either. Both merit their price difference on the value of the materials being used; the high cost of these materials creates exclusivity. However, the $20,000 watch is much more expensive than the materials based on “craftsmanship” and “brand” — whereas, the Apple Watch can very likely price the higher end model solely on the price difference in materials and manufacturing methods.
4. Inherit in the horrible logic that no one will buy a $1000+ Edition Watch because everyone can have the “same thing” in a $350 Apple Watch is the suggestion that everyone will be buying $350 low end Apple Watches. I don’t think Apple will mind selling “everyone” a $350 Watch and barely selling the model that costs more than $1000.
But, hey, how ’bout we wait to see how much an Apple Watch costs first before claiming it will be THOUSANDS AND THOUSANDS of dollars and no one will buy it.
Edited 2014-12-15 20:45 UTC
I think the price has less to do with functionality and more to do with the 18K gold part…