Thoughts on the Future of the Apple Watch Edition (the Gold One)

Tomorrow, the Apple Watch goes on sale. In three models – alumin(i)um, stainless steel and gold – this new device in search of a user base will attract the Apple faithful, and the tech-curious. I’ll be buying one, though I’m not sure which model (though it won’t be the gold Apple Watch Edition.)

Apple watch editionApple will certainly sell a bunch of gold watches, but we’ll probably never know how many. Priced from $10,000 to $17,000, this watch is clearly for those who want to throw money away. (Save your time; don’t bother commenting that this isn’t expensive for a luxury watch, because this isn’t a luxury watch. It’s the exact same smartwatch as the others, just with a gold case.)

I already wrote some thoughts about this model after the keynote where Tim Cook presented the Apple Watch, and its pricing. I said:

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.

Here’s what I think will happen. After this first Apple Watch model, the Apple Watch Edition will fade away. We won’t see a version 2 of the gold watch, though we may see other metals in the future. Again, to quote my earlier article:

“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.”

I think the gold Apple Watch is a very un-Apple product. I think it was approved because Jony Ive wanted it to show off to his millionaire friends, and, perhaps, for some of the other millionaires that run Apple. But that type of product is not in Apple’s DNA (to borrow an expression from Steve Jobs).

10 thoughts on “Thoughts on the Future of the Apple Watch Edition (the Gold One)

  1. I bet you are right, Kirk, that the Apple Watch Edition watch [sic, or possibly, “sick”] will just fade away. Although it would probably help its sales, if it had a distinctive, recognizable, and memorable name. On the other hand, the fact that this is just an Apple Watch with a different case makes it easy for Apple to continue production on very low volumes. If it costs Apple an extra $4000 to make the Edition cases, and they sell for $10K to $17K, then Apple earns an extra $6000-$13K in profit on each watch. That’s a pretty sustainable business model.

    I don’t entirely agree with you, that “this isn’t a luxury watch”. Every luxury watch offers the primary functionality of a $12 watch. The secondary and extra features on every luxury watch can be exceeded by the apps on any smartphone. So every luxury watch sells two primary intangibles- exclusivity and looks. Having a particular set of features in a convenient-for-some-people package is a tertiary attraction. The looks of the Edition are good enough to be in the luxury watch conversation, especially since there is no accounting for taste. Or at least, no independent auditing of those taste accounts. The feature set, although identical to every other Apple Watch, and of tertiary importance in the luxury market, is quite impressive. The weak point for Apple is exclusivity. I doubt that they will be able to generate the exclusive aura that a luxury watch needs, in order to succeed. High price isn’t sufficient. But it is remotely possible that Apple could get price plus functionality to give them a niche in the luxury watch market. If we see some major movie stars and politicians wearing the Edition, and using its unique (for luxury watches) features, then others eager to waste their money will probably buy in.

    • Good points. I was actually just thinking that if Apple were serious about selling the “Edition,” they’d be running magazine ads with actors, athletes and fashion models. That’s what sells luxury watches, not some covers on fashion models, or blogs by a former fashion model.

    • “The feature set, although identical to every other Apple Watch, and of tertiary importance in the luxury market, is quite impressive. The weak point for Apple is exclusivity.”

      Actually, there are very specific difference for the Edition watches, which add both exclusivity and value to the product.

      The first (of course) is that it is made out of a solid block of 18k gold. Plus, even the bands that comes with the Edition has a solid gold clasp or buckle.

      Pure gold (24k) is priced at about $1,200 an ounce, so while gold does add significantly to the high price of the Edition, it certainly doesn’t account for all of it. (Note: I don’t know the weight of the gold in the Edition watch and straps, but it is probably not more than a few ounces)

      The other exclusivity for purchasers of the Edition are the “concierge” services that Apple will provide to owners of the gold watches. These include:

      – Customers will immediately get to skip queues to try out the device and will get to do so in a private room rather than around a table with other users who are buying the cheaper Sport and Stainless Steel options.

      – Those who choose to buy an Apple Watch Edition can spend up to an hour with a dedicated member of Apple staff and can choose to have their watch set up in store or via a video call at home.

      – Since the Apple Watch Edition will only be available in select stores, a new courier-to-store programme will allow customers to get a watch sent to their local outlet for them to try.

      – Purchasers will get access to a 24-hour support line for two years (instead of 90 days support at Apple Stores for others).

      – And other special treatment and features for buyers.

      You and I are obviously not the target market for the Edition watch, so it is easy for us to think that no one would buy it (since we wouldn’t).

      But there are many people who not only can afford luxury items and service, but they have come to demand it in their lives.

      This is who the Edition watch is marketed too, and Apple will be selling plenty of the gold Apple Watch to this particular market.

  2. I bet you are right, Kirk, that the Apple Watch Edition watch [sic, or possibly, “sick”] will just fade away. Although it would probably help its sales, if it had a distinctive, recognizable, and memorable name. On the other hand, the fact that this is just an Apple Watch with a different case makes it easy for Apple to continue production on very low volumes. If it costs Apple an extra $4000 to make the Edition cases, and they sell for $10K to $17K, then Apple earns an extra $6000-$13K in profit on each watch. That’s a pretty sustainable business model.

    I don’t entirely agree with you, that “this isn’t a luxury watch”. Every luxury watch offers the primary functionality of a $12 watch. The secondary and extra features on every luxury watch can be exceeded by the apps on any smartphone. So every luxury watch sells two primary intangibles- exclusivity and looks. Having a particular set of features in a convenient-for-some-people package is a tertiary attraction. The looks of the Edition are good enough to be in the luxury watch conversation, especially since there is no accounting for taste. Or at least, no independent auditing of those taste accounts. The feature set, although identical to every other Apple Watch, and of tertiary importance in the luxury market, is quite impressive. The weak point for Apple is exclusivity. I doubt that they will be able to generate the exclusive aura that a luxury watch needs, in order to succeed. High price isn’t sufficient. But it is remotely possible that Apple could get price plus functionality to give them a niche in the luxury watch market. If we see some major movie stars and politicians wearing the Edition, and using its unique (for luxury watches) features, then others eager to waste their money will probably buy in.

    • Good points. I was actually just thinking that if Apple were serious about selling the “Edition,” they’d be running magazine ads with actors, athletes and fashion models. That’s what sells luxury watches, not some covers on fashion models, or blogs by a former fashion model.

    • “The feature set, although identical to every other Apple Watch, and of tertiary importance in the luxury market, is quite impressive. The weak point for Apple is exclusivity.”

      Actually, there are very specific difference for the Edition watches, which add both exclusivity and value to the product.

      The first (of course) is that it is made out of a solid block of 18k gold. Plus, even the bands that comes with the Edition has a solid gold clasp or buckle.

      Pure gold (24k) is priced at about $1,200 an ounce, so while gold does add significantly to the high price of the Edition, it certainly doesn’t account for all of it. (Note: I don’t know the weight of the gold in the Edition watch and straps, but it is probably not more than a few ounces)

      The other exclusivity for purchasers of the Edition are the “concierge” services that Apple will provide to owners of the gold watches. These include:

      – Customers will immediately get to skip queues to try out the device and will get to do so in a private room rather than around a table with other users who are buying the cheaper Sport and Stainless Steel options.

      – Those who choose to buy an Apple Watch Edition can spend up to an hour with a dedicated member of Apple staff and can choose to have their watch set up in store or via a video call at home.

      – Since the Apple Watch Edition will only be available in select stores, a new courier-to-store programme will allow customers to get a watch sent to their local outlet for them to try.

      – Purchasers will get access to a 24-hour support line for two years (instead of 90 days support at Apple Stores for others).

      – And other special treatment and features for buyers.

      You and I are obviously not the target market for the Edition watch, so it is easy for us to think that no one would buy it (since we wouldn’t).

      But there are many people who not only can afford luxury items and service, but they have come to demand it in their lives.

      This is who the Edition watch is marketed too, and Apple will be selling plenty of the gold Apple Watch to this particular market.

  3. I agree that the Edition model was probably a Jony Ive vanity project. I also believe it will sell well enough to warrant future versions.

  4. I agree that the Edition model was probably a Jony Ive vanity project. I also believe it will sell well enough to warrant future versions.

  5. “Here’s what I think will happen. After this first Apple Watch model, the Apple Watch Edition will fade away.”

    I disagree with that opinion.

    There are MANY people in the “1%” who can afford to buy a $10,000 to $17,000 gold Apple Watch, just as they can easily buy $30,000 to $80,000 gold Rolex watch.

    Rolex sells well over a million watches per year, and hundreds of thousands of those are gold watches.

    The average selling price for the gold Edition Apple Watch will likely be about $15,000. At that price, selling just one Edition watch is equivalent to selling 43 of the $350 Sport watches.

    In other words, Apple doesn’t need to sell anywhere near the same number of gold Edition watches for it to be a highly profitable product for Apple!

  6. “Here’s what I think will happen. After this first Apple Watch model, the Apple Watch Edition will fade away.”

    I disagree with that opinion.

    There are MANY people in the “1%” who can afford to buy a $10,000 to $17,000 gold Apple Watch, just as they can easily buy $30,000 to $80,000 gold Rolex watch.

    Rolex sells well over a million watches per year, and hundreds of thousands of those are gold watches.

    The average selling price for the gold Edition Apple Watch will likely be about $15,000. At that price, selling just one Edition watch is equivalent to selling 43 of the $350 Sport watches.

    In other words, Apple doesn’t need to sell anywhere near the same number of gold Edition watches for it to be a highly profitable product for Apple!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.