In all the coverage and hype concerning Apple’s event on Tuesday I’d like to concentrate on one easily-overlooked product I feel is by far the most revolutionary of those announced. I am of course talking about the Apple Watch Edition — Apple’s gold watch.
Where we might expect an Apple Watch to be aimed at competitors like Samsung, LG, or even Sony, the Apple Watch Edition is aimed squarely at Rolex. It is Apple’s first-ever true luxury product.
There have been near-luxury products from Apple before, but nothing like the Apple Watch Edition, which I am convinced is the brainchild not of design director Jony Ive or CEO Tim Cook, but of SVP of Retail and Online Stores Angela Ahrendts (former CEO of Burberry) and Patrick Pruniaux, former VP of Sales and Retail at Swiss watchmaker (and LVMH brand) Tag Heuer.
Let’s consider for a moment what this gold watch means for Apple. They didn’t announce the price for the gold model, but given that we’re told the Apple Watch comes in three basic styles starting at $349 I’d guess that the gold model will list for 10 times that amount or $3495. 10X pricing is one of the fundamental definitions of a luxury product.
Insane, right?
Wrong.
That price puts the Apple Watch squarely in Rolexville and Heuerland.
You’ll be able to buy one at the Apple Store but I’ll tell you right now it will never be in stock and will have to be a special order. Gold Apple Watches will instead be sold in the same stores as those other fine watches. That’s why Apple hired Monsieur Pruniaux.
Apple gets a new, small (but highly lucrative) sales channel that is perfectly happy holding inventory. And if they sell Apple Watches the watch retailers will probably sell iPhones to go with them.
The innards of all Apple Watches are identical. Only the cases and bands vary. Think of the profit margin Apple is likely to get on those gold watches! It’s probably on the order of 70 percent.
And while fine watches look like a boutique market, taken in aggregate the market is not small. Sales of Swiss watches alone were more than 21 billion Swiss francs (more than $23 billion) in 2012. Rolex — if that’s Apple’s prime target — is a $4.5 billion company.
Seventy percent of $4.5 billion is by my calculation about the profit Apple would expect from selling eight million iPhone 6’s.
I’m not saying this will be an enduring business for Apple. Far from it. But Apple will seed $1 billion in inventory alone and back it up with huge advertising those margins can easily support. The Apple Watch Edition will be 2015’s luxury gizmo. I’ve seen the watch and it’s stunning. Just imagine the iPhone market share trajectory compressed into a single year. There’s a push and pull to this since none of the competing eWatches has a luxury model so having the gold will help the other Apple Watches while the success of those watches can’t hurt the gold model.
So iPhone 6’s are great and Apple Pay is exciting, but there’s a distinct possibility those products could pale in profit compared to the Apple Watch Edition, which ought to also be more or less immune to the market performance of other Apple products.
Think if it as a market hedge for Apple that might — and should — have Paris and Geneva trembling.
Is the market for smart watches THAT big?!?!?!
I’m a geek, so I see several Pebbles and a few Google watches on the wrists of my geek friends. When one of our non-geek friends see them, they roll their eyes.
Granted, the Apple Watch looks much nicer, but it’s still bulky. It still requires charging (at least overnight). But the FEW people who still wear watches do so because they look NICE, not because they need to.
One young geek friend with the Samsung watch actually said. “This is SO COOL! I don’t have to pull my phone out of my pocket to see the time! I JUST LOOK AT MY WRIST!”
I just stood there with my mouth hanging open… Did he REALLY just say that?!?!?
LT.son, it’s not as bulky as a Rolex.
Re: “But the FEW people who still wear watches do so because they look NICE, not because they need to.” I don’t believe you said that. I’ve been wearing a watch of some sort for as long as I can remember, and refer to it constantly for time and date throughout the day. The existence of cell phones doesn’t change that, since they are too bulky to always carry around, especially at home, and when charging you can’t carry them. Now that phones are computers, who wants to lug it out of a pocket, fumble with the power button, and be careful not to touch the screen for fear of accidentally doing something, just to check the time.
jimmy
jimmy wiooooooooooooooooooooooo
Trembling??? Maybe somewhat concerned but I doubt they are all that scared. I think that anyone who can afford to spend $3500 for a watch can afford to buy more than one and the other will no doubt still be a Rolex, Tag Heuer or some other brand I can’t afford anyway.
As for me, I’m still using the iPhone 4S I bought used last year and a 5 year old MacBook Pro (here’s hoping it lasts another year!). No iWatch for me anytime soon as my eyesight isn’t what it used to be. Come to think of it, that large iPhone 6 does have some appeal…….maybe next year provided I can get a used one to use with my prepaid wireless service.
That’s like saying the Audi A8 is competing with Rolls Royce.
If you like to show off with an expensive watch, you don’t take the gold version of a watch that geeks walk around with. You need an exclusive watch brand. It doesn’t need to be smart. If you have big money, you have human assistants, not digital ones.
Look at the Vertu phone brand. Stupid phones, but expensive and exclusive. Would be worthless if it had the Nokia branding, even though it actually was a Nokia brand.
The gold watch will be highly coveted in Asia. Gold shows status and Apple shows status.
But if a $500 dollar iphone is status, can they afford a $3500 watch?
There are as close to as many people in China who could afford a $600-$700 iPhone as the entire population of the United States (+/- 300 million).
In total numbers, there are going to be many more people in China who might pay $3500 for a watch than there are in the U.S.
A Rolex is a timepiece that is treasured and given on very special occasions. I does the one thing that it has done for decades — it tells the time.
The Apple Watch is a piece of tech gear that will have a moment in the sun, then will quickly be replaced by the next new shiny tech gizmo with more features, better battery life, better connectivity, etc.
Huge misstep on Apple’s part. They created the trend of having to replace your music player/phone/tablet every 6 months. No one will buy a $3500 gizmo that will be old news in 6 months.
Bob — your Apple fanboy is showing.
Sure they will. A $3500 watch isn’t an investment, it’s a vanity purchase. You drop that on a watch when you have money to burn. And if you’re burning money, who cares if it’s for something built to last or the latest tech toy? Sure, Rolex’s are practically indestructible, but that’s not why most people buy them. They buy them because they’re Rolexes. And they’ll happily buy an iWatch if they’re the new shiney.
Re: “…you have money to burn…” No one has money to burn. You only think you do until you buy a house, a car, and get a family.
If you truly think no one has money to burn, then you clearly do not understand anything about life at the top of the economic/wealth food chain.
The robber barons of the world really can light their $4,000 Cuban cigars with $100 bills, if they choose, and not miss a beat.
The watchmakers aren’t catering to billionaires. There aren’t enough of them to keep the industry alive. By “no one” I was exaggerating. I was also alluding to the fact that many of us think we have money to burn until we get sucked into home ownership coupled with responsibilities to family members, both of which entail unforeseen expenditures.
Let’s look at numbers.
Rolex sells abou 750,000 watches a year, at an average price of about $10,000 for revenues of $7.5billion
That’s not iPhone money, but it’s about twice what Apple was making on iPods back in, say, 2010.
Now will Apple get Rolex level sales? I haven’t a clue. The Rolex numbers show us how many people there are who want to flaunt their wealth; it tells us nothing about their tastes.
I personally am with John Gruber on this. Apple is using the standard jewelry hook (“a timeless masterpiece you can past on to your grandchildren”) to sell something they KNOW is ephemeral, with a useful life of around 4 years or so. This strikes me as a very dangerous road to go down, and a way to piss off people who are very touchy, very entitled, and often with very loud voices, unless you have a backup plan for how to “restore” value to the watch every time the hardware is updated (eg by keeping the shell but replacing the guts).
No, that’s what made ipods and iphones great as a “vanity” purchase was the low price tag. At $3500 you lose that. Maybe not for the 1% or not, but it’s not like it’s going to hold value like a Rolex. Especially if you’re talking 70% margin. Apple isn’t in for big margins, their in for re-sales and upgraders. Think micro-transactions like Apple Pay..Do they want to sell you one apple watch once… or a new apple watch every year.
I tend to agree with this. Fine watches don’t lose much (if any) value over time. They don’t become obsolete like a smart watch will.
I could see it selling for $800-1000, but not $3500.
I have many friends with Rolexes. To a person, they comment that, for a timepiece, it’s nice jewelry. As an accurate timeKEEPER it’s lousy. I’m happy with my Seiko; accurate and “fancy enough”.
Smart watches? Until thin format, flexible screens and enough power to completely replace all functions of a smart phone come along, I’ll pass.
To a true geek, any model of Apple Watch 1.0 is a non-starter. It needs to do more.
To someone who has to spend a lot of money to feel (or publicly announce that they are) superior, maybe, but I doubt the market is that big.
Bob, as an aside, when I first got to this planet they said math would be optional, yet I have to answer a math question to post…something isn’t right here…
Hear Hear,
I only saw the broadcast news overview of the watch – but I thought big deal. As is, I don’t want one.
“To a true geek, any model of Apple Watch 1.0 is a non-starter. It needs to do more.”
Yeah, if only it had a developer kit and the ability to run apps! Oh, wait….
[…] Robert X. Cringely has an interesting take on the gold Apple watch. […]
It’s about Mayo, not Rolex. Always tell my kids to stay near the fresh water and the Mayo Clinic. That’s the key: The Mayo is already involved, and soon, will tell me that it can be a better healthcare partner … and cheaper … if I wear an aWatch.
Health is the bigger Apple Watch story, of course, but I’m pretty certain about the intended luxury strategy for Apple. Rich people get sick, too.
I’ll take this moment to respond to several other comments.
Rolex, as a going concern, worries about 2015 sales, not about its installed base that generates no revenue at all: in the sense of 2015 they are vulnerable. Yes, rich people who like watches will own several which I think makes the point that they’ll have no problem adding another. Yes, smart phones have hurt watch sales but not in the luxury segment. I understand that you’ll wait for a used iPhone 6 but guarantee you that Apple doesn’t give a damn about you.
@Rich people get sick, too.
and if they are rich enough, they can buy their way to the head of the liver transplant line. ding! order up!
We’ll know about the profit margins when the first sales include a gold trimmed matching iPhone with the aWatch. I’m not sure they’ll be charging so much unless gold goes up, but I could be wrong.
The iCare medical controller (no, it’s not a sensor) will be an interesting addition. Actually Mayo is a minor partner, there are 7 other major medical centers working on the iOS package and the other one, which is farther along.The malpractice and privacy injury lawyers are already salivating and counting their money from the first lawsuits.
Rolex should be worried, but somehow the real rich folk will want to wear analog mechanical for the look and exclusiveness and the fact it won’t be obsolete based on the whims of Cupertino. I do believe it will be a hit among the young “Nuveaux Riche” in Asia but among the real upper class it will not be so popular.
My question is why is Apple trying to get out of its electronic consumer market and into the upper crust jewelry product business? Will this be a separate brand effort divested from the “premium” consumer electronics segment? Do they see and end to the current fat margins on the rest of their products? Are they facing a GE or IBM moment? Maybe a Westinghouse moment?
I buy a lot of tech products, and I think smart watches are the least interesting thing to come along in decades. This is a $3500 product I wouldn’t wear for free, but more to the point, I’m not interested in a $150 smart watch either.
The fun about the gold iWatch is that its 0 risk (assuming the mainstream watches sell well). If they don’t sell after all, Apple can just take them back, put the innards back in plastic for the cheap crowd, and still take a profit on the appreciation factor of the gold on the commodities market.
Appreciation? On January 1 2012, gold was $1737/ounce. Today it’s $1249.
On the same date, the Dow was about 12,300. Today it’s over 17,000.
The era of precious metal acquisition being a sure way to increase value is long gone. Then again, the era of acquisition of ANYTHING (especially real estate) as a way to increase value is long gone.
Maybe the gold watch is just something to give Tim Cook when he retires.
I’ll stick with my real stainless steel Rolex — 28 years old and still telling the time perfectly.
One thing we’re forgetting: The Apple Watch has a killer app on it: Passbook.
Passbook keeps your airline boarding passes. Taking out my phone and showing it to everyone who wants to see my boarding pass is a hassle when I have two bags with me. Being able to flash my watch will be much more convenient. Also, Passbooks show you your boarding information. It will be nice when you’re running from one plane to another to be able to glance at your watch to see if there’s a gate change.
Passbook is also where your credit cards are stored for Apple Pay. Oh, the Apple Watch has NFC communication on it. You can use it on Apple Pay without taking your cellphone out of our pocket. And, if you have an older iPhone without NFC communication, you can sync your old phone with your Apple Watch, and use your Apple Watch for Apple Pay. In other words, this is the first watch that may be doing something your smartphone can’t.
I don’t know how well the Apple Watch will sell, but it is obvious that Apple has put a lot of work into it. The use of the “digital crown” as the user interface, Apple Pay compatibility, and six different models with 12 different bands.
How do you flash a watch when you carry 2 bags?
He lifts at the gym.
What do you mean carrying bags? I’ve got the watch and people. You’ve got the sport version and carry bags for excercise, no?
Big Brother is Watch-ing you.
Ho ho ho. We weren’t talking about Google though.
People have written about the margin on the watch. Sure, but the real value in having the top-top end model is for marketing and positioning.
They will give them away to celebrities, and CEO’s of companies they are courting. Anything to get them seen.
It makes and keeps Apple being the top end brand, the aspirational brand.
They actually announced follow on products that have the same feature set as the Samsung phablet and watch. Then they positioned them as the top brand to have. Features? Who cares about features, it is the Apple Gold!! Today the press and bloggers are panting over them.
Brilliant.
Fear and Loathing? “Henri kicked the ether over under his watchmaking table, greedily sucking the tainted air, as he clumsily screwed the little canister of nerve gas under the winding stem of the custom watch, as used syringes clattered to the assembly bins all around him.”
I see the gold edition as one of 20 watches, hanging like ties in a rack, that Uber Riche picks from each morning, depending on the audience going through his office’s lobby.
“The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge.”
Bob, while I respect your take on tech issues, this is not a tech issue.
The people who buy the iWatch will buy it as a tech item but people who buy a Rolex will NOT buy this watch.
Check out this article from the Reg for the correct view of this Apple mistake.
https://www.theregister.co.uk/2014/09/05/jony_ive_iwatch/
It’s a nice little device and I think the iWatch will cut into the luxury and mid market watch brands the way Lexus has cut into Mercedes market. They may not own the category, but it will be perceived as innovative, status conveying, and it will help drive some new watch customers, who like me, had abandoned wearing a watch 6 or 7 years ago.
I do think that the $350 model makes more sense, as spending $3000 on a gold version 1 is committing to $150 a month depreciation. Which might be true of a Rolex, too. But you won’t feel the urge to replace the Rolex 18 months later, so its unrealized depreciation vs actual realized depreciation.
Of course only the bottom end of the luxury market cares about mundane matters like depreciation.
Bob, how do you see Intel’s MICA watch fitting into this narrative.
http://newsroom.intel.com/community/intel_newsroom/blog/2014/09/03/media-alert-opening-ceremony-and-intel-reveal-mica-my-intelligent-communication-accessory
Opening Ceremony is top tier, and you don’t have to carry around a smartphone.
Fight the hype at https://www.defectivebydesign.org/apple
There are a bunch of reasons that people buy high end watches. One of which is a story. People like to read about how the innards are hand made by little men with magnifying glasses and how each piece is hand polished and fitted. It is the personal touch that makes a high end watch special. I have a $3.95 novelty watch that keeps better time than a mechanical Rolex, yet it doesn’t have the provenance, history and artistic form that makes it great.
A Patek Phillippe is a work of art that is so durable that they are passed down from father to son. No one is going to want a three year old iWatch, much less a twenty year old. Further, the perpetual motion of a mechanical watch means that it is timeless, that it will always work or can be repaired. The iWatch will need to be charged every night and like its battery it will be ephemeral.
So while people may pay $400.00 for an iWatch or even $1400.00 they will not pay $4000.00. Though at $1400.00 they might still be at a 70% profit margin. Which is a nice Margin if you can get it.
Regards,
Joe Dokes
If the Edition watch is indeed to be mostly sold, as you suggest, through luxury jewellery channels, and with accompanying iPhones, then I would not at all be surprised about a “more luxurious” iPhone version to go together with the Edition watch when it comes out.
Of course there has been an iPhone version with golden accents for some time now, but I am thinking about something seriously gold-plated here. And rose gold. I am in no doubt that Apple will be happy to snatch this very clientele from the likes of Vertu and Feld & Volk.
I predict:
1) Cheep knockoffs of the gold version. Buy cheap iWatch, gold plate, profit…
2) Brand name – Tiffany/Cartier/… coming out with diamond covered version.
With those predictions, you must play the stock market or are a broker. How much have you lost?
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!
A Rolex is a thing of beauty that says “Class”. An Apple watch is high-class tat! If you wear a Rolex you are saying that you appreciate quality and beauty. If you wear an Apple watch you are saying that you are a prize plonker! An Apple watch is a sumo wrestler pretending to be a ballet dancer.
> A Rolex is a thing of beauty that says “Class”.
Hmm … no.
In spite of what you (and Bob) might have heard, no, it is not. OK quality, but fugly and used by gullible vulgarians with more money than sense.
They’re not particularly attractive any more and the only thing they say is that you’re good at theft and you don’t mind letting people know. Not stylish or subtle and not that useful. I’m referring to rolexes of course.
So, raise hands now, who’s got a Vertu phone here?
Anybody?
Nobody?
Bueller?
Vertu has sold 350,000 phones over its lifetime.
If we assume some sort of exponential growth (admittedly a dubious assumption) and a few other “reasonable” assumptions, maybe we can have them at around 80,000 sales a year. That’s a tenth of annual Rolex sales.
What this tells me is that there’s a large market that has the MONEY for a blinged out phone but choose not to buy. If this is because of taste, or a belief that phones change too often, that’s that; but if it’s because they choose to buy gold iPhones instead (because they consider them simply the superior device), then Apple is actually in a very good place. It suggests that they can reach Rolex levels in sales.
Interesting hypothesis Bob. When you buy a Rolex or a Patek Phillippe watch you are buying a product with longevity. I can’t see the iWatch having a luxury brand type service programme behind it that makes the case a long term purchase.
The iWatch misses this bit of the offering, some Omega and TAG Heuer models by comparison are ‘fashion watches’ with basically the same ETA quartz movements as your common Swatch. Which is a similar kind of business model to the iWatch.
Wondering how you’re supposed to pay for that Apple watch after you try it on and find that the magnetic clasp brushes against your wallet pocket and demagnetizes your credit card.
In most of the world, credit cards work with chips, not magnetic stripes.
Beauty maybe skin deep, but luxury isn’t. People buy expensive watches, because they have precision watch works on the inside , the a name on the outside.
The apple watch edition, is exactly the same as the other apple watches but with a gold case, and a nice box that doubles as a charger. They maybe able able to double the price for the edition.
A luxury apple watch needs more: Completely waterproof to 10 meters, smaller thiner design, longer battery life. Maybe they can move the battery to the band?
but… they will be priced at 10x the entry price, and they don’t expect to sell any, because its just a placeholder until 2nd Edition comes out.
My last watch cost $7.50 at WalMart. Is it time to move up to Apple Gold?
most people use those “new fogy pocket watches” that also make phone calls and let you see the weather and buy stocks with apps. not some wrist thingie.
we pay for them with two years of servitude 😉
Well maybe the value of the gold used will appreciate the longer you own it, meaning that when the time comes to replace the battery you just dump the electronics, sell the gold and your investment is returned? Now that is a perpetual watch 😉
I seem to remember similar arguments against iPad when it first appeared. No one will want one or use one etc … How wrong that view was.
Umm…there is on heck of a logical leap in this article:-
“Rolex […] is a $4.5 billion company.” followed by “Seventy percent of $4.5 billion is by my calculation about the profit Apple would expect from selling eight million iPhone 6’s.”
The latent assumption that Apple could completely displace Rolex in this space is a bit fantastical, I think. You’re probably right about their profit margins and their sales channel but its hard to see them shifting anything like the kinds of volumes that would have them troubling Rolex, Tag etc.
[…] The Apple Watch Edition is aimed squarely at Rolex. It is Apple’s first-ever true luxury product. […]
This discussion is fascinating. The arguments for and against the prospects of the Edition product are equally compelling.
I own a rolex, bought for me by my wife to mark an important event. But I can see myself buying an Apple Watch, and wanting the Edition model for business reasons. I am successful, but not wealthy.
This will be interesting to…watch.
I’m not going to buy a $3,500 gold IWatch if I can’t get a $3,500 gold-plated IPhone 6 to go with it. I’d look like a complete cluck at the yacht club without the set.
They’ll have to make it as durable as a Rolex or Tag Heuer to appeal. If it suffers from typical electronic MTBF or even typical Apple MTBF, it will poison Apple’s reputation.
Maybe apple will upgrade the innards of your Edition Watch every few years/months (for the approximately the price of proletariat version) so that it can always have the same features as current products. If you can afford the watch, then this upgrade will be pocket change. Keep getting some followup cash from those customers who have it. It’s a revenue stream Rolex doesn’t have either.
Whatever happened to those $7500 Mac special edition laptops?
Cringely has a tendency to go overboard in imagining what Apple will do. The Apple TV still doesn’t exist. Then there is the IPods that would be sold at Blockbuster loaded with your movie rentals.
I agree with Bob. When I read about that watch, my first thought was : “Apple will eventually open an Apple Store, rue de la Paix”, in Paris, mostly known by tourists with (a lot of) petrodollars.
Apple is carrying the dreams of Wall Street, not of geeks like me, any more.
Douglas Engelbart had a vision about human augmentation. The user interface was a mean to an end.
He showed the moon.
Not sure Steve Job had seen more than the finger.
He was babbling about education but failed with Next and never really followed thru.
Well, the web is born on Next. There are worse failures.
Steve had learnt one thing or two about typesetting and his engineers applied it a time it was mostly ignored in
the computer industry.
He succeeded with Apple excelling at cool user interfaces in lighter and smaller boxes, eventually moving
to an old but trusted operating system : Unix.
Now with John Ive, Apple is become a fashion brand.
With more and more money flowing to some people, there is a lot of money to be made there. And with its
recent hires Apple can make a lot of money at a time with its followers in computer and phone businesses
will eventually eat Apple margin. Technical excellence eventually become commoditized.
The only domain left with insane margin is fashion, and Apple is already a high end brand, so there is a fit.
So this is is a smart business move carried on by sharp professionals… for lack of real vision.
This watch is also the last nail on Douglas Engelbart coffin.
There is a sense of tragicomedy here, but I have not Ted Nelson’s literary talent in a language foreign to me
so I can’t convey it.
PS: I am writing that on a macbook, I use a NUC with linux as a file server. My iPhone 4 battery becoming unreliable, I bought a Moto X a few month ago and was surprised not to have a ping of envy when reading about the iPhone 6.
btw, I tried to follow the Apple mass but they messed their feed and I was treated in France with a unreliable feed with a
translation in chinese.
Computerwise, Apple is now just another brand and not even so compelling at that. I expected a hires (non pro) ARM macbook but no show. Apple has to protect its margins. Apple motto could be margin and volume. If you can’t go
for the latter, go for the former.
Sure, nice games like zen garden puzzle are missing on Android but
my Kindle books are available as well on Android.
I predict in 5-6 years we’ll see Chumlee and Big Hoss offering some guy $500 for a mint one of these.
I’m so happy I gave up wearing a watch. It’s going to be very hard to convince me to put one on again.
Much ado about not very much. I stopped caring what time it was a few years ago. If a watch-like device could perform some Medical Tricorder functions, that would be useful. I figure we’re at least 50 years away from that if not more.
I think maybe its closer to 5 years than 50.
finally Apple is getting back to it’s strength – style. you are right in that the should focus on their strong suit – making electronics that are intuitive to use and stylish to be seen using. Let the other race horses beat them to the latest wiz-bank features – this company should continue to focus on the experience of using the electronics, not on having the hottest new features. they got big originally by changing the business models of the music business, then the cell phone business, now the jewelry business. This is why tech reviewers just don’t understand apple, nor do they need to, tech reviewers are not the masses, and the masses love apple for catering to them.
I shudder to think of the type of deposits accepted at a wiz-bank.
I’m interested in the iWatch, but not so much the gold Apple Watch here. I’ve already got an Omega (James Bond’s watch) and I’m happy with it, but the extra functions that I can have with the iWatch are interesting. But I only have two arms so the market for watches it limited!
Paying three and a half k for something I can get for $350, even if it is gold plated, only tells me that some some people have more money than sense and if you need a watch to tell people how ‘cool’ your are there’s more wrong with your life than a lack of common sense.
And anyway I haven’t worn a watch for years so I am hardly likely to start now, gold plated or not.
I think there’s more to this than meets the eye. I think it’s a move by Apple to offer more consumer products down the line in different market sectors. Apple has always been known for incredible styling and design. Who knows, next may be an Apple coffee-maker (or other appliances) that you can control from your computer, iPhone, and now, your iWatch.
It could happen….
https://www.fastcodesign.com/3033874/apples-1986-fashion-line-has-become-fashionable-for-the-first-time
Its about wearable technology. Blue haired Rolex warring customers might not be tempted by technology they don’t understand but their trust fund grandchildren will find what a GOLD Apple watch can do pretty damn cool. And its another eco system link to the customer to help generate renewable income for Apple. Rolex has been around a long time, but as time marches on, how long can a device that can only tell time last? Its an open question.
I won’t bother, it’s just a watch. That said, it is probably a good choice for the Apple crowd as it is feature rich with the kind of stuff that they will want but that I increasingly find to be distractions and not additions. I loaded a new ROM on my smartphone in Jan and made a point of only downloading things when I need them, not anticipating that I will, and there isn’t much there now. KISS my life.
If I ever wanted to have all those additional features, I can wait 6 months and see what hits the market and then buy something for half the price and none of the status. Which would actually be a bigger win for me. But I also have to ponder if this is all good for me. If I lived an Apple crowd life, which I equate with urban, modern, and technology dependent, then more tech, more tools, would be good. But I don’t want to lose the skills that I have, like reading a map, plotting a course, knowing my heart rate by listening to it, remembering my wife’s birthday because it is important to me (and her!). I can almost imagine that Ape General finding a pair of glasses, dentures, and an Apple watch/phone, in the ruins of New York and and dismissing humankind as being weak and worthy of domination. Maybe there such a thing as too much help? Maybe that is also part of the value of a Rolex, or even a Timex, it just does simple things and makes you do the rest.
Problem with a 3k Apple Watch is it’s relatively short life span
I’m sure there are plenty of rich punks that won’t mind upgrading their 3k piece of tech jewelry every other year, but previously high end watches were thought to be timeless. Tech is not timeless. Will be interesting to see how it is received.
[…] Cringley (influential tech journalist) on the Apple Watch and the luxury market: I, Cringely Fear and loathing in Rolex-ville – I, Cringely Reply With […]
Sadly, the beautiful curve belongs to the buckle and not the watch…sigh!
Saying that the gold Apple Watch is the “brainchild” of Angela Ahrendts and Patrick Pruniaux is putting the cart before the horse.
.
Is there any doubt that Apple started working on Apple Watch before they hired these two people? Not in my mind.
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A gold edition watch only makes sense from an aspirational brand like Apple. They already knew they were going to make it before they hired Angela Ahrendts and Patrick Pruniaux. Expertise from those two would have then been used to just work out the finer details, as well as the retail strategy.
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The idea of not having them in stock at an Apple Store is also silly. There are only six variations of the high-end Apple Watch Edition. In terms of inventory space they are all small (though they’d be kept in a locked safe in the back, so that’ll take up a little more room). In terms of merchandise cost the margins on these will be huge, so they won’t be that big a hole in Apple’s wallet to keep even just one or two of each in stock at each store. As with jewelry stores, which are also present in malls across America, with the money they make on just a single sale it’s totally worth it to keep the merchandise in stock.
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Besides that, Apple Stores all keep Mac Pros in stock which cost $4000 each for the base high-end model. So it’s not like they don’t already have a significant amount of high-value merchandise on hand at each store.
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Plus many Apple Stores are located in very upscale areas. I wouldn’t be surprised if the Apple Stores in at least New York, London, Paris, and Hong Kong all have quite a large number of each high-end Apple Watch in stock all the time. Those stores will be selling several of each every day, too.
Thanks for posting that link. Looks to be very informative, though I haven’t read it yet. I did a quick search for the words “thick” and “dimensions”, which were not found in that article. My 20 year-old Omega is only a quarter inch thick, has an “unscratchable” crystal, and a replaceable battery. Those features have spoiled me for any other watch, communicating or not.
I can’t find the post that my September 11th comment was replying to, so here is the link to the article itself: https://www.hodinkee.com/blog/hodinkee-apple-watch-review
Rolex does make jewelry, but they make very good watches too. It’s not unusual to find examples from the 1940’s still working, still accurate and still valuable.
Apple has checked all the boxes with the iWatch, sapphire crystal, gold body, probably a choice of fancy bands. (never mind the commodity Chinese innards, no one sees them anyway)
But the real issue is, how much do you trust Apple? This watch has to have an operating system and Apple will have to constantly force updates. Despite the wonderful materials it’ll begin to diminish in speed and usefullness within the year of purchase and keep slowing down after until you buy a new one. You’ll end up with a perfect gold and sapphire do-dad. Most rich people I know, at least the ones who made their own money, will not want to get into that spiral.
But if someone with no regard for the money they spend (inherited usually) truly wants a Veblen object, the gold iWatch is a perfect choice, made more Veblenesque after a couple os updates force them to toss it and upgrade. Apple will have done society a service by helping them go broke as fast as possible.
Somehow I doubt the Swiss are worried.
People spend big money on Rolexes because they expect to pass them on to their grandchildren. The Apple watch will be obsolete in 18 months. As we saw with Nokia’s Vertu phones, luxury and technology don’t mix because they operate on different time scales.
[…] Fear and loathing in Rolex-ville (Robert Cringely) […]
Hi Bob,
This observation brings to mind the $1800 (over $10,000 in today’s dollars) gold Pulsar LED digital watch of the early 1970s, which were indeed status symbols. By 1977, I had a functionally identical TI watch in black plastic for $25…
“The high frequency crystal ensured that the time deviated by no more than three seconds a month, making it the most accurate watch in the world.” Also: “When hearing the $1500 price tag for the production model, Carson quipped: ‘The watch will tell you the exact moment you went bankrupt!'” http://pabook.libraries.psu.edu/palitmap/Digital.html In that case, the value was in the technology and the gold; In the Apple case, it’s all in the gold, since anyone can buy the tech for $350.
Regarding the “short life span” of Apple Watch: They made a point of talking about the sealed electronics package inside. Might it not be swappable/upgradable? “Bring your watch to any Apple Store, and for $99 we’ll replace the electronics with a new package that will work with your iPhone 9.” (And they might offer that even if a future Apple Watch doesn’t need an iPhone to work.)
The Apple Watch must get thinner over time… So no, simply replacing internals will not be an option 🙂
I’ve been a WIS (watch idiot savant) for a few years now, and I have a few watches that cost more than $3500 (which is what I pegged the gold aWatch at, too). I just moved from Santa Monica. I would bet that the market in LA alone (or, at worst LA, Miami & Vegas) is big enough to warrant making a gold watch. There are a lot of people in those three cities with enough cash to drop thousands on a piece of disposable tech. Heck, Vertu still makes non-smartphones, and you can see them on sale at the Tourneau store nearest you…
The Apple Watch is a gadget with a very short lifespan. Golden Apple Watch is the same gadget in a different color (and price tag). A watch produced by Rolex is an accessory associated with a very long tradition, as well as long lifespan, and, as some would say, timeless design. Those people who buy Rolex, they do it for a very specific reason, and for that same reason they are not and will not be buying a smartwatch anytime soon, be it from apple or any other company. No reason for Rolex to fear.
The competition isn’t so much about the product but about the limited “arm” real estate. If you want the features of the smart watch, you have to give up the bling. You still get some of the bling effect, since people will assume you must be successful if you can afford a new $3.5K watch every year.
[…] and quiet. One does not buy expensive watches in a noisy room, and Apple Stores are noisy rooms. Cringely thinks Apple will sell Apple Watch in existing high-end watch stores; they might, but I can’t see them not selling them in their own […]
[…] and quiet. One does not buy expensive watches in a noisy room, and Apple Stores are noisy rooms. Cringely thinks Apple will sell Apple Watch in existing high-end watch stores; they might, but I can’t see them not selling them in their own […]
I think the solution for the problem of longevity of Rolex vs. maybe a 5 year lifespan of an iGadget is simple: Apple will take the old gold iWatch in exchange for a new one and some money. That way you will not be ashamed for having a drawer full of unwearable gold bracelets. It needs no complicated swapping of insides of a watch and thinks like that. Apple will recycle gold parts and all other things of any value.
[…] Cringely went further suggesting the gold Apple Watch Edition was the most interesting of Apple’s announcements and represented their first genuine luxury product: “In all the coverage and hype concerning […]