Kirk McElhearn wrote his thoughts on the Apple Watch pricing. More of these posts are to follow. For instance…
I’ve said a few of my thoughts concerning the usefulness of the watch. Beside the usefulness, there is the perceived value of the product that must be weighed in the pricing. Apple has a considerable investment in engineering and design time, not to mention the watches’ hardware and software. It could take hours for them to recoup the development costs alone (at the rate Apple makes revenue…).
And then, there’s the materials and manufacturing of the beautiful, one-of-a-kind watches. They are very much Apple stock: built sleekly with the fanciest industrial processes. Jony Ive probably has a few dozen of them piled on the desk; some made in California, and many others assembled overseas… In any case, crafting watches with this much precision has to come at a premium manufacturing price. Think about the cost of the original iPhone and iPod. At this level of state-of-the-art miniature computer wearables, the costs have to be considerable. Just consider that the Pebble smart watch, with everything that it can do, has nowhere near the power of the Apple Watch, yet it’s relatively the same size.
With all of this in mind, I’m going to take a wild guess at what Apple watches will cost. I’m basing these on what I’ve heard around the Internet, Apple’s other product pricing, and my gut feelings.
Apple Watch Sport
This is the model at the starting price point. It has an aluminum body, a relatively simple wristband, and comes in two sizes. The smaller size, 38mm (weight), will fit women and men. The larger, 42mm, would probably be suitable for men with larger wrists. I could handle either size.
Apple says the starting price is $349. It’s highly unlikely, however, that they would charge the same price for the larger watch. There’s good reason to guess that the larger watch will have better hardware specs. If it doesn’t now, it makes sense that it will in future generations of the line-up. Also consider that Apple has set lots of precedent for charging a little extra for a ‘little better’ device. So, then,
Apple Watch Sport 38mm = $349
Apple Watch Sport 42mm = $399
The customers interested in this model like the watch about as much as they like (or once liked) the iPod Classic and the iPod Mini. It seems like a good compromise: Get the smart watch with all of the cool features, but built in the simplest materials, because you’re apt to treat it roughly.
This is where I think the pricing is most interesting. The middle model, this one housed in polished stainless steel, will be very desirable to a large percentage of customers. Sure, the A.W. Sport will probably sell very well, if not the most, but many will want the steel watch for the prestige that comes with it.
Think about the motivating desires. You’re not so cheap that you could only afford the base model. You’re not so elite that you gorged your bank account to purchase the high-end gold watch. The ‘Apple Watch’ says that you’re a balanced, sensible person that respects traditional watch standards, because aluminum watches haven’t ever been in vogue, to my knowledge. The Sport pricing is enticing, but the steel watch will look great among your peers. So, then,
Apple Watch 38mm = $449
Apple Watch 42mm = $499
Seem too low? Remember that a good number of customers with the steel watch will be attracted to multiple wristbands. I can already see myself purchasing whatever band that comes with the watch, by default, and getting another one or two within the first year. The wristbands are swappable for different occasions. And my sense of style will change over time. Since this is the case (uh, I mean wristband [the bands are analogous to iPhone cases]), and Apple knows it, they’ll make a lot of money from customers — a large percentage of them — that want multiple wristbands.
Thus, Apple will make a lot of money, so the watch need not cost more than $500, because we’re going to spend more than $600 on the thing with wristbands, when it’s all said and done.
Apple Watch Edition
This is the model that everyone keeps talking about. The gold housing of the Apple Watch Edition is throwing everything off that we know about Apple products. When was the last time that Apple sold a device made with specially-hardened 18-karat gold? (Please don’t answer that question.) It’s very difficult to predict the price, because there’s not enough precedent for it. So, then,
Apple Watch 38mm = $1,999
Apple Watch 42mm = $2,199
This is very much baseless price speculation. The real answer is, none of us knows how much the gold costs Apple, or how high the perceived value of the gold will launch the cost skyward. Apple has a huge investment in them. They are marketing them to people that ordinarily shop for watches that are more than $5,000 — and a good number of their competitors’ traditional watches aren’t even made with gold.
A former boss of mine has a few very valuable watches. Their value ranges from $4,000 – $8,000. Not one of them is made of gold. They are worth that much solely based on their perceived value.
My A.W. Edition prices are based solely on my gut. I think that Apple would rather see more of the gold watches on more people’s wrists in the wild than see them on the Apple retail store shelves for months on end.