Thoughts on the Apple Watch Edition

On stage yesterday, at the end of a nearly 90-minute presentation of Apple’s new watch, and other products, Tim Cook said:

“There will be limited quantities of the Apple Watch Edition. It is priced from $10,000, and it will be available in select retail stores.”

Mr. Cook paused for a half-second just after saying the price, and the silence in the room was palpable. Watching Cook say these lines, I was struck by what seemed to be a bit of embarrassment, as though he wasn’t fully behind the idea of selling a watch at this price.

In the weeks preceding yesterday’s announcement, a lot of people made predictions of the price. (Mine are here. I was pretty close for the first two models, but way off on the Edition.) In discussions I had with several people, I constantly heard the comment, “But this is a luxury watch. You don’t understand the luxury watch market.”

Perhaps. I’d never buy a watch that costs more than my car. But what about people who do know the luxury watch market? The Verge published some comments by Benjamin Clymer, who runs a luxury watch website. Mr. Clymer explained what makes a luxury watch, and, according to his comments, the Apple Watch Edition is not a “luxury watch,” other than its price. He said:

“With Apple Watch, the price differentiation between the entry-level Sport at $349, the standard Apple Watch at $549, and the Edition at $10,000 is about perceived value — what materials are used in the case, bracelet, and straps, but also how much people believe they should be paying for the product. In addition to perceived value, mechanical watches are also priced by human value: how much of the work is done by hand (in many cases using 200-year-old methods).”

Mr. Clymer discussed the amount of human intervention and design present in watches at various price points, and said:

“Above $5,000 one should expect both an in-house movement and some hand-finishing, with details not only recognized but put at the forefront.”

But he also pointed out that:

“…these watches are not devoid of perceived value — the majority of watches here benefit from multi-million-dollar advertising and branding budgets, conditioning us to believe they are worth the price of entry.”

That’s a very important point to realize. Even if you aren’t the target demographic for these watches, you’ve certainly seen their full-page ads with well-known athletes, actors and models, in magazines. These ads cost a lot of money; and much of what you pay for in, say, a Rolex is its marketing.

Mr. Clymer discussed watches around the Apple Watch Edition price point:

“From $10,000 to $20,000, you are into the realm of watchmaking where everything you see is original and interesting — or at least should be. […] all featuring truly in-house movements with a moderate amount of hand-finishing to internal components. These watches will be assembled by hand, completely in Switzerland and offer the incredibly low tolerances and extreme quality for which this industry is known.”

In my article predicting the price of the Apple Watch Edition, I said:

“The Apple Watch Edition is not a luxury watch; it’s just a gold-cased version of the cheaper watch. There’s nothing exclusive about it, nothing special. It’s not like more expensive watches where you pay for complex machinery. Yes, there is gold; that will make it more expensive than the other models. But not that much. Estimates of the cost of the gold suggest that the metal would cost less than $1,000.”

I still feel that way. It’s the same watch with a different case.

I wonder if Tim Cook’s embarrassment is a tell; a sign that Cook didn’t want to make a gold watch. That the Apple Watch Edition is a vanity project for Jony Ive, a luxury watch aficionado who rides in a Bentley to work every day. A $10,000 watch (or even $17,000, the highest priced model) is not Apple. While the company is often criticized for selling products at prices higher than competitors, Apple has always backed these prices up with higher quality and better design. Apple has never been a company of bling, and the Apple Watch Edition is bling, nothing more.

Apple will sell a few, to rich people wanting to stand out from the rabble who buy the cheaper models. But the Apple Watch Edition is very much an un-Apple product.