
On the Pricing of Apple Watch - nnain
http://daringfireball.net/2015/02/apple_watch_pricing
======
CJefferson
There is one massive different with usual watches.

Expensive watches are often sold under the idea you will never have to buy
another watch, and neither will your children, or your children's children. I
will reasonably surprised if any new Apple Watch hasn't been made forcibly
obsolete by Apple within 5 years or so, and shocked if it is still functional
in 10.

Furthermore (and more worrying perhaps for people paying that much money),
once a model of Apple Watch comes out with a better CPU, then your watch is no
longer the latest-and-greatest, whereas older watches don't have the same
degree of last year's begin inferior (of course, they can still go out of
fashion).

~~~
nicpottier
Yes, exactly, this seems so obvious that I don't understand why Gruber is
ignoring it.

The iWatch will be obsolete in 24 months at most (less if you are the type who
values status and want a "$20,000" watch as the next model will probably come
out 12-18 months later)

Maybe there are enough uber-rich people that are ok buying $20,000 watches
every year, but that seems like a really, really small market.

Then again, maybe the bands will remain the same, so if the primary investment
is in the band, then that could last a bit longer. Even then I'd expect that
every 2-3 years they will have a form factor switch that will make all
previous bands obsolete.

We'll see.

~~~
jmsdnns
Phones were once something you bought once and rarely bought again, but that
changed and now we all buy new phones once every 2'ish years.

~~~
soylentcola
Sure, but I pay ~$400 every couple of years for a phone. I also bought a Moto
360 for $175 (normal non-sale price $250). I may replace that in a year or two
when the tech has improved enough to justify the update.

Either way, these are still mostly luxuries (I could get a passable smart
phone for under $100 and any old watch for $30-50 or just not wear one) but it
wouldn't be the first time a company put out a range of products so people of
different budgets can become customers while still offering some high-end
model for status seekers to shell out for and mortals to drool over.

I'm not interested in the Apple watches at the moment but it makes sense for
them to sell a "mere mortal" version for $300-500 as they typically charge a
bit more than competitors for their name and reputation for polish. If they
sell a Rolex-grade version for rock stars and wealthy heirs then I guess it
just adds to the status of the brand as a whole even if nobody normal would
ever buy one.

------
rndn
Eww, that just reminds me of the fact that some people are wealthy enough to
spend 20K for some status symbol, a sum of money I would try to build awesome
stuff with. At the same time, I realize that those who can't afford a MacBook
might think in similar terms about me, so thank you Apple for making me feel
bad and to remind us once again how fucked up everything is.

------
carsongross
It could happen, but that would be very aggressive and experimental. The
perfect watch, the Rolex GMT, has a base price of about 8k in steel, and goes
for about 26k in 18k gold, for a 3.5x multiple[1]. (Ignore diamonds, etc. Not
relevant to this discussion.)

So a 10x multiple on plain 18k gold over steel would be quite aggressive. And
I don't know of any other watch where the exact same base watch is available
at 25x less from plain 18k gold. You can get high-quality swiss movement
homages to the GMT at around 1k, but they are clearly different watches and
movements.

Apple has of course done their homework on it and I have no understanding of
the asian market, but if the pricing is that aggressive I would be surprised,
particularly with the android competition.

[1] [http://www.jomashop.com/rogmii.html](http://www.jomashop.com/rogmii.html)

------
moeedm
10 years from now Apple won't be a tech company, they will be an international
luxury brand that creates products in many different areas. This is just the
first step.

~~~
twoodfin
I don't think they'll ever make anything that isn't fundamentally a computer
or an accessory in support thereof.

Of course, you're right that over time that will mean creating products in
more and more different categories.

------
tessierashpool
when Jobs returned to Apple, he gave a big speech about how market share never
mattered to BMW, and that Apple should become the BMW of personal computers.

it did, and it went on to become much, much more. but its huge fame today is
pushing the Mac away from being BMWs.

all of which makes me desperately wish there was a Lamborghini or Ferarri of
personal computers. most people might only need a computer to look at
Facebook, but if you're doing animation, making electronic music, _and_
building web applications - all of which I am personally doing, often - then
you absolutely need a great GUI and a Unix-like foundation.

if you're reading HN because you want to do a startup, please, give us the
Lamborghini of personal computing. we will buy. Apple knows it, but they don't
have time to care, because they're going to make so much more money selling
digital watches to the people who drive actual Lamborghinis.

~~~
publicfig
The Mac Pro is pretty much exactly that though. If you need a more specialized
machine, you'll probably need to consider building your own machine in the
first place with your specific needs.

------
aetherson
If you buy a Rolex for $20k, it's not just that your watch will continue to be
_functional_ for 20 years or more. It's also that you can believe with a fair
degree of confidence, based on a long history, that your 20 year old Rolex
will still be a classy piece of jewelry at that time.

Whereas even if there's some kind of upgrade program to prevent computer-part-
obsolesence, nobody knows if smart watches will even be a thing in five years.
Maybe in five years, Microsoft HoloLens will have blown away the smartwatch
market to the point that every important wearable is glasses, not a watch. Or
maybe they will be watches, but they'll have moved to a snap-bracelet deal
where there's a much wider screen. Or maybe wearables will just be dead, dead,
dead. Nobody knows.

------
js4all
This speculation is insane. An Apple watch is no mechanical masterpiece like
luxury watches in this price region. No watch lover will pay such prices for
cheap Chinese electronics. If Apple pulls that stunt, the are geniuses in
marketing.

~~~
greedo
Sounds like what the cellphone makers were saying about Apple when rumors of
the iPhone began to circulate.

And I would disagree entirely with your argument. An iPhone [1] is truly a
masterpiece of engineering and programming. An Apple watch will have a lot of
that heritage, and will sell accordingly.

[1] I would classify most of the highend Android smartphones the same way.

~~~
js4all
I am really not sure, but maybe people will value the watch that way. We will
see.

------
car
Considering the rapid obsolescence of electronics, why would I put a quickly
decaying piece of hardware my wrist? In the luxury/heirloom department, I much
prefer high end mechanical wristwatches. Those have an appeal that will last
much longer (decades) then quickly outdated hardware (months). I only have to
look at the replacement cycle for cell phones, which is already insane.

~~~
Steko
The point is you aren't most people and most people simply don't give a rip
about mechanical watches. Just like most people didn't use blackberries in
2007 even though that was the most popular high end phone. The people that did
have blackberries by and large preferred their blackberry's features -- just
as the people who like mechanical watches prefer mechanical watches -- but
that didn't mean Apple's new product didn't/can't find a market.

------
radley
A $20k (or even $5k) gold Apple watch will be a litmus test for me - anyone I
encounter will automatically be someone I wouldn't do business with. The idea
of a gold Apple watch is akin to gold-plated cars / guns for drug dealers. The
only value it adds it to show you have money.

The fact that Apple would even consider it only demonstrate the corrosion of
values and vision to me.

~~~
eof
basically everything in traditional business atire is just demonstration of
wealth if you really dig into it.

what about the other ten thousand solid/plated gold watches? rolex watches
containing gold are probably all over wrists of people you would be happy to
do business with.

don't get me wrong.. 5k for an iwatch is ridiculous

~~~
radley
I have no problem with expensive goods, even gold watches. It's the part of
"slap some gold on my Apple device" that is counter-intuitive.

There's no way Steve Jobs thought "what we're really missing is a gold
version". It's not zen. It's gaudy.

The few extremely-successful people I've met that have impressed me have been
very low key. Can you imagine PG wearing a gold iWatch???

~~~
terrywilcox
There's a word for judging people by what they wear or how they look...

~~~
radley
[https://newbeautifulera.wordpress.com/2013/03/30/how-
nature-...](https://newbeautifulera.wordpress.com/2013/03/30/how-nature-says-
do-not-touch-a-classic-far-side-comic/)

------
wodenokoto
I think it is interesting how Apple might bring and entire industry into the
general public.

I mean, I knew you could get very, very expensive watches, but now this is
suddenly that is brought in front of everybody.

------
gjoeworm
I think his $5k estimate is much stronger than his $20k estimate.

An Apple Editions is not a Patek Phillippe. There is a dramatically different
replacement cycle which means that any attempt to cut and paste lux strategies
is going to either fail entirely, or narrow the market so thoroughly as to be
indistinguishable from failure.

~~~
twoodfin
That's assuming there's no upgrade story to be told at the launch event.

I agree it would be a little weird coming from the modern Apple, but I just
can't see a marketing pitch that sells even a "merely" $5,000 device that's
functionally equivalent to a $350 one and essentially guaranteed to be
obsolete within 5 years.

Obviously there's a market that can afford to treat such a luxury as
disposable, but that doesn't seem like a large enough market to justify
creating the Edition line.

They're going to sell these things (at least partially) through upgraded Apple
Stores, and presumably those stores will have to offer (possibly off-site)
jewelry-like fitting and repair services. How much of an engineering obstacle
would it be, really, to guarantee that the next N generations of Watch
internals will be able to be retrofitted into the Editions? Probably with a
nice markup on the labor, too! After all, if there's one thing they're good
at, it's continuous miniaturization.

I think it would dramatically expand the market for the high end models. If it
extended down to the stainless tier, I'd certainly buy a much more expensive
Gen 1 version.

~~~
guan
Or the watches will have significant trade-in value because they can ditch the
electronics and melt down the gold.

~~~
aetherson
Gold currently sells at $1200 per oz. Looks like smart watches are typically
around 2oz in weight, though presumably a gold smart watch would be heavier.
On the other hand, presumably also a large amount of the weight is non-gold.
And you'd obviously pay a penalty for the cost of removing the non-gold bits
and recycling the gold.

So, overall: The pure commodity value of the gold might significantly defray
the cost of a hypothetical $5k aWatch, but not very much of the cost of a
hypothetical $20k aWatch.

