I'd say they will be 4 different ?Watch Sport prices. There will be the 38mm Silver, 38mm Space Grey, 42mm Silver, and 42mm Space Gray. I'm going to guess that will likely be the order from least expensive to most expensive, although I could see the middle 38mm Space Gray and 42mm Silver being the same price.
I'm not so sure on the price difference for the sizes. It is one thing to price capability differently (e.g. storage or processor) but Apple Watch is "personal." Yes, the 38/42 sizes have more screen real estate, but the reason for the 2 sizes is fashion, not capability. Although no one will say it, the smaller size is targeted at females; the later for males. Yes, there are exceptions, but pricing with a invidious differential by gender is...impolitic.
"Bob Mansfield, then closely involved in the watch project, said that Ive’s role was to be “himself and Steve” combined. Yet Ive still had to make a case to Apple, and Mansfield recalled “a lot of resistance.” It wasn’t clear how the company would display such things in stores; there were also concerns about creating a divide between wealthy and less wealthy customers. (As Mansfield said, “Apple wants to build products for everybody.”)"
The Mac Pro divides customers up to about $10k but the Mac line is not in steps like $350, $600, $10,000 and why would anybody pay $10k if it only has 0.5 ounce ($600) of gold in it?
I'm not so sure on the price difference for the sizes. It is one thing to price capability differently (e.g. storage or processor) but Apple Watch is "personal." Yes, the 38/42 sizes have more screen real estate, but the reason for the 2 sizes is fashion, not capability. Although no one will say it, the smaller size is targeted at females; the later for males. Yes, there are exceptions, but pricing with a invidious differential by gender is...impolitic.
All will soon be revealed.
Is that how watches are priced when they are otherwise the same style? Remember we're talking about the length of the strap, width of the strap, footprint of the casing, size of the display and battery. Are those buying the 38mm ?Watch Edition really going to be paying the same as the 42mm ?Watch Edition despite getting less gold? That seems highly unlikely to me.
PS: Based on what I can roughly measure the size of the ceramic discs are not the same size. I hope this doesn't mean different sized charging units for ?Watch. That seems like it would be folly.
The app that gives you a countdown to the day that the Apple Watch is discontinued.
You mean when the warranty expires? I can see that somewhere in the system prefs; or an app that collects your apple care details. But sure; an app that details release of successive versions might be cool. And I can see it being part of some sort of upgrade/ trade in on an Edition program.
Is that how watches are priced when they are otherwise the same style? Remember we're talking about the length of the strap, width of the strap, footprint of the casing, size of the display and battery. Are those buying the 38mm ?Watch Edition really going to be paying the same as the 42mm ?Watch Edition despite getting less gold? That seems highly unlikely to me.
You might be right about the Edition pricing because of the metal content.
I think you are also right that traditional watches did have size price differences. But...this is new ground here. Sure; it's a watch. But it is something else too that has a tradition of gender neutral pricing.
How do you know it won't be more than 1oz? Or rather, what logical assumptions and educated guesses are you making to come to that conclusion? I can certainly see Apple wanting to use as much internal space as possible for the electronics, but not being a luxury watch aficionado I have no foundation in which to build up a hypothesis on the amount of gold needed for the casing.
I have a freaking 37.5 grams bracelet which is around 1.2 troy ounce. There's no way that a damn Apple Watch case will need more gold than my bracelet.
That Rolex has a gold strap though and the whole body is gold. The Apple Watch has a huge circular area at the bottom for the sensors so the only gold part is the bezel (there will be some on the strap clasps but they'll be priced separately). Someone took apart the Rolex and weighed each part:
The case ring would be closest to what Apple has, which is about 14 grams of gold or 0.5 ounces as you said earlier. That's $600 of gold. Take the same parts from the entry $350 model without a 40% margin so $210 of parts. Add 40% margin to $810 and you get a retail price of $1350. I'd say $1299 but I guess $1499 would allow for some changes in gold prices.
Estimated gold supply per year is 50-70m Troy Ounces or 1.5-2.2 billion grams. If Apple sold 20 million watches with 14 grams, they'd use 280m grams or about 1/5th of the world's gold supply. It will vary on the amount they use and retail price:
That might be what Jony Ive meant about Switzerland being worried. Not that their marketshare would be affected but that they'd be putting pressure on the gold supply.
The reason that I don't think it will be anywhere near $5k or $10k is that it was described as mass-market luxury and they didn't want to create a class divide, they wanted everyone to be able to afford the product. Also, the gold one still has exactly the same functionality as the cheaper ones.
I reckon the pricing tiers will be such that the base one is at $349 and the next one not having gold in it won't be much higher in price but the sapphire will add to the price. No more than $600. That gives the gold one at $1299-1499 a massive price gap with some exclusivity but not out of the price range of people who might buy a Macbook Pro. Apple's Mac ASP is ~$1300.
Apple does manage to sell about 20 million Macs every year at an ASP of ~$1300 so it's possible they can sell 20 million gold watches at that price but it's more likely that the bulk of the sales will be the lower-end watches.
Good method of estimation there. BTW, 1 troy ounce is around 31 grams for 24k gold (9999) = $1200. For 18k, it's even cheaper...maybe like $450/half ounce. So with the 40% margin of $660 ($210 part + $450 gold) would be $924. My prediction is $999 for the Edition one.
Because trying to make a car isn't? At least the search engine is within the realm of what Apple does, and not a completely unrelated business requiring a massive capital investment and a fundamental change to their business model of maintaining high profit margins on the products they sell.
How does Apple make money off a search engine? They're not in the advertising business. Apple needs products that will maintain and grow the $180B revenue base.
That Rolex has a gold strap though and the whole body is gold. The Apple Watch has a huge circular area at the bottom for the sensors so the only gold part is the bezel (there will be some on the strap clasps but they'll be priced separately). Someone took apart the Rolex and weighed each part:
The case ring would be closest to what Apple has, which is about 14 grams of gold or 0.5 ounces as you said earlier. That's $600 of gold. Take the same parts from the entry $350 model without a 40% margin so $210 of parts. Add 40% margin to $810 and you get a retail price of $1350. I'd say $1299 but I guess $1499 would allow for some changes in gold prices.
Estimated gold supply per year is 50-70m Troy Ounces or 1.5-2.2 billion grams. If Apple sold 20 million watches with 14 grams, they'd use 280m grams or about 1/5th of the world's gold supply. It will vary on the amount they use and retail price:
That might be what Jony Ive meant about Switzerland being worried. Not that their marketshare would be affected but that they'd be putting pressure on the gold supply.
The reason that I don't think it will be anywhere near $5k or $10k is that it was described as mass-market luxury and they didn't want to create a class divide, they wanted everyone to be able to afford the product. Also, the gold one still has exactly the same functionality as the cheaper ones.
I reckon the pricing tiers will be such that the base one is at $349 and the next one not having gold in it won't be much higher in price but the sapphire will add to the price. No more than $600. That gives the gold one at $1299-1499 a massive price gap with some exclusivity but not out of the price range of people who might buy a Macbook Pro. Apple's Mac ASP is ~$1300.
Apple does manage to sell about 20 million Macs every year at an ASP of ~$1300 so it's possible they can sell 20 million gold watches at that price but it's more likely that the bulk of the sales will be the lower-end watches.
Good estimate. I made the same analysis when Apple announced the watch and reached almost the same number. The only unknowns are cost of the leather strap and the sapphire glass since the sport Apple watch have different strap and glass. The leather might not be that expensive but any idea how much sapphire on other watches cost?
I have a freaking 37.5 grams bracelet which is around 1.2 troy ounce. There's no way that a damn Apple Watch case will need more gold than my bracelet.
I agree with that. I'd think Apple would want to make as much room for internals as possible and there are no gold bands on ?Watch Edition, outside of some minor metals pieces on the leather or plastic.
Show me a 18k gold watch that cost less than $3000! You wont find any.
But how much is of a solid gold watch actually components made of gold? With a smartwatch wouldn't much less of the components be gold because the movements wouldn't be gold or is that also the situation with gold watches? I assume it's not.
"The term “spring forward – fall back” is meant to trigger your memory to set your clocks forward one hour in the spring at the start of DST, and one hour back in the fall when DST ends."
I think it's just the watch. Perhaps launching on first day of DST.
They need to get Broadwell based hardware out soon. The watch is hardly deserving of an event on its own.
The timing of the event, along with the clear reference to the watch, suggests to me that Apple will hold off on other introductions until maybe the developer conference.
They can't possibly put off an update to Broadwell in the MBA! Even if Apple watch is a complete success it isn't as important as MBA to Apples bottom line.
Anything introduced now would be overshadowed by the watch and also would detract from the impact of the Watch by itself. Apple won't want the press spending ink on anything other than the Watch for the next few months.
Apple is a massive company, they can easily manage more than one marketing project at a time.
Or, this whole event could just be an announcement of a fix to that annoying calendar bug that erroneously shifts appointment times at the switchover to/from daylight saving time. LOL!
I read the first 2 pages and then skimmed the 8th one. Nothing jumped out at me that would make a definitive case for ?Watch Editon starting over $9,998.
I'm not saying it won't, as I stated earlier we have don't know how much gold will be used, their markup, or how they will have to price then in order to balance how much gold they can get ahold of.
Interesting arrangement on their ?Watch page of those 18 models. They seem to go in order from least to most expensive but the leather models show then 3 colors for the 42mm models with the looped leather FOLLOWED BY the 3 colors for the 38mm models.
Could that extra material in the clasp be enough to make it cost the same or more than the 42mm models that are leather? I think it at least sets up an argument that the 38mm and 42mm models will be the same price when they have the same band.
I think people who think it will be $1200-$2000 have no idea how much solid 18k watches cost.
I understand that, but I think you need to stop comparing a standard watch to ?Watch when trying to discern the price because we have no concept of how much metal is required for the casing.
I think the watch will use about $800 of gold. Add $200 for internals and strap. That gives it a cost of $1000. I'd say the minimum price would be $5000 and up to $10,000 if they use more gold. Margin has to be 80% to cover other costs like extra security measures, new displays, massive marketing, and gold cost risk. This would be in line with the margins of rolex and other lux brands. This will not be a mass market product.
50% margin with $1k costs would be $2k, 80% margin would be $5k. A high margin does allow for fluctuations in gold prices.
If they had $1000 of parts ($800 gold) with 50% margin to hit $1999 and gold went up 70%, the build cost would be $1560, reducing gross margins to 22%. That could make a net loss unless they increased the price but they could change the price. If it fell below $500/ounce, the build cost would be $450, giving 77% margins on a $1999 watch. Higher volume and high margins.
$1200 is ridiculously cheap. Show me a 18k gold watch that cost less than $2000! You wont find any.
Standard gold watches are built by hand and buyers are paying for that exclusivity. The Apple Watch is manufactured. Nobody's paying over $5k for a manufactured digital watch.
[VIDEO]
The only difference between the cheap Apple Watch and the gold one is the gold. The insides are held in with resin. If Apple charges far more than the cost of the gold then 3rd parties can even manufacture solid gold bodies themselves and offer upgrades for the cheap watches. They already plan to offer gold plating for the cheap watch.
I've read all the argument as to why Apple will likely charge well under $5,000 and why they will definitely charge over $5,000, and neither has convinced me either is impossible. Without knowing the amount of gold needed, the market for a gold watch, or many other factors I guess we just have to wait.
I'm surprised no one has made an argument from Apple's PoV. They have typically stepped prices in fairly even increments, but I could see a gold watch being priced with a huge divide over the most expensive SS model, simply to keep the [I]luxury[/I] aspect separate.
PS: If there is an adequate update path and they offered platinum I would have then consider such an expense, but I'm not a fan of wearing gold.
All this bandying about of Rolex prices is getting me depressed, I've got to bring my 1980's Submariner Date in for repair (it's started gaining an hour in a half hour of actual elapsed time): I am now expecting sticker shock. As it was my goto dive watch forever I'll just wince and get it done, but still.
Of course with their repair facility located on Fifth Avenue in NYC why should I be surprised eh?...
As to the Apple Watch, the bands look easily swappable so I expect there'll be a big market for Apple (and later others) providing extras.
Comments
I'd say they will be 4 different ?Watch Sport prices. There will be the 38mm Silver, 38mm Space Grey, 42mm Silver, and 42mm Space Gray. I'm going to guess that will likely be the order from least expensive to most expensive, although I could see the middle 38mm Space Gray and 42mm Silver being the same price.
I'm not so sure on the price difference for the sizes. It is one thing to price capability differently (e.g. storage or processor) but Apple Watch is "personal." Yes, the 38/42 sizes have more screen real estate, but the reason for the 2 sizes is fashion, not capability. Although no one will say it, the smaller size is targeted at females; the later for males. Yes, there are exceptions, but pricing with a invidious differential by gender is...impolitic.
All will soon be revealed.
http://www.newyorker.com/magazine/2015/02/23/shape-things-come
"Bob Mansfield, then closely involved in the watch project, said that Ive’s role was to be “himself and Steve” combined. Yet Ive still had to make a case to Apple, and Mansfield recalled “a lot of resistance.” It wasn’t clear how the company would display such things in stores; there were also concerns about creating a divide between wealthy and less wealthy customers. (As Mansfield said, “Apple wants to build products for everybody.”)"
The Mac Pro divides customers up to about $10k but the Mac line is not in steps like $350, $600, $10,000 and why would anybody pay $10k if it only has 0.5 ounce ($600) of gold in it?
Is that how watches are priced when they are otherwise the same style? Remember we're talking about the length of the strap, width of the strap, footprint of the casing, size of the display and battery. Are those buying the 38mm ?Watch Edition really going to be paying the same as the 42mm ?Watch Edition despite getting less gold? That seems highly unlikely to me.
PS: Based on what I can roughly measure the size of the ceramic discs are not the same size. I hope this doesn't mean different sized charging units for ?Watch. That seems like it would be folly.
I'll be shocked the gold Apple Watch Edition costs a dime over $2500. $10,000? Noooooo way!
An alternate band, as they're interchangeable, could be priced anywhere.
The app that gives you a countdown to the day that the Apple Watch is discontinued.
You mean when the warranty expires? I can see that somewhere in the system prefs; or an app that collects your apple care details. But sure; an app that details release of successive versions might be cool. And I can see it being part of some sort of upgrade/ trade in on an Edition program.
Is that how watches are priced when they are otherwise the same style? Remember we're talking about the length of the strap, width of the strap, footprint of the casing, size of the display and battery. Are those buying the 38mm ?Watch Edition really going to be paying the same as the 42mm ?Watch Edition despite getting less gold? That seems highly unlikely to me.
You might be right about the Edition pricing because of the metal content.
I think you are also right that traditional watches did have size price differences. But...this is new ground here. Sure; it's a watch. But it is something else too that has a tradition of gender neutral pricing.
Dunno.
How do you know it won't be more than 1oz? Or rather, what logical assumptions and educated guesses are you making to come to that conclusion? I can certainly see Apple wanting to use as much internal space as possible for the electronics, but not being a luxury watch aficionado I have no foundation in which to build up a hypothesis on the amount of gold needed for the casing.
I have a freaking 37.5 grams bracelet which is around 1.2 troy ounce. There's no way that a damn Apple Watch case will need more gold than my bracelet.
That Rolex has a gold strap though and the whole body is gold. The Apple Watch has a huge circular area at the bottom for the sensors so the only gold part is the bezel (there will be some on the strap clasps but they'll be priced separately). Someone took apart the Rolex and weighed each part:
http://www.rolexforums.com/showthread.php?t=240119
The bracelet alone had 51 grams.
The case ring would be closest to what Apple has, which is about 14 grams of gold or 0.5 ounces as you said earlier. That's $600 of gold. Take the same parts from the entry $350 model without a 40% margin so $210 of parts. Add 40% margin to $810 and you get a retail price of $1350. I'd say $1299 but I guess $1499 would allow for some changes in gold prices.
Estimated gold supply per year is 50-70m Troy Ounces or 1.5-2.2 billion grams. If Apple sold 20 million watches with 14 grams, they'd use 280m grams or about 1/5th of the world's gold supply. It will vary on the amount they use and retail price:
http://www.cultofmac.com/313458/demand-apple-watch-use-third-worlds-gold/
That might be what Jony Ive meant about Switzerland being worried. Not that their marketshare would be affected but that they'd be putting pressure on the gold supply.
The reason that I don't think it will be anywhere near $5k or $10k is that it was described as mass-market luxury and they didn't want to create a class divide, they wanted everyone to be able to afford the product. Also, the gold one still has exactly the same functionality as the cheaper ones.
I reckon the pricing tiers will be such that the base one is at $349 and the next one not having gold in it won't be much higher in price but the sapphire will add to the price. No more than $600. That gives the gold one at $1299-1499 a massive price gap with some exclusivity but not out of the price range of people who might buy a Macbook Pro. Apple's Mac ASP is ~$1300.
Apple does manage to sell about 20 million Macs every year at an ASP of ~$1300 so it's possible they can sell 20 million gold watches at that price but it's more likely that the bulk of the sales will be the lower-end watches.
Good method of estimation there. BTW, 1 troy ounce is around 31 grams for 24k gold (9999) = $1200. For 18k, it's even cheaper...maybe like $450/half ounce. So with the 40% margin of $660 ($210 part + $450 gold) would be $924. My prediction is $999 for the Edition one.
How does Apple make money off a search engine? They're not in the advertising business. Apple needs products that will maintain and grow the $180B revenue base.
I agree with that. I'd think Apple would want to make as much room for internals as possible and there are no gold bands on ?Watch Edition, outside of some minor metals pieces on the leather or plastic.
But how much is of a solid gold watch actually components made of gold? With a smartwatch wouldn't much less of the components be gold because the movements wouldn't be gold or is that also the situation with gold watches? I assume it's not.
PS: Are you taking my bet or not?
They need to get Broadwell based hardware out soon. The watch is hardly deserving of an event on its own.
I read the first 2 pages and then skimmed the 8th one. Nothing jumped out at me that would make a definitive case for ?Watch Editon starting over $9,998.
I'm not saying it won't, as I stated earlier we have don't know how much gold will be used, their markup, or how they will have to price then in order to balance how much gold they can get ahold of.
Could that extra material in the clasp be enough to make it cost the same or more than the 42mm models that are leather? I think it at least sets up an argument that the 38mm and 42mm models will be the same price when they have the same band.
I understand that, but I think you need to stop comparing a standard watch to ?Watch when trying to discern the price because we have no concept of how much metal is required for the casing.
50% margin with $1k costs would be $2k, 80% margin would be $5k. A high margin does allow for fluctuations in gold prices.
If they had $1000 of parts ($800 gold) with 50% margin to hit $1999 and gold went up 70%, the build cost would be $1560, reducing gross margins to 22%. That could make a net loss unless they increased the price but they could change the price. If it fell below $500/ounce, the build cost would be $450, giving 77% margins on a $1999 watch. Higher volume and high margins.
Standard gold watches are built by hand and buyers are paying for that exclusivity. The Apple Watch is manufactured. Nobody's paying over $5k for a manufactured digital watch.
[VIDEO]
The only difference between the cheap Apple Watch and the gold one is the gold. The insides are held in with resin. If Apple charges far more than the cost of the gold then 3rd parties can even manufacture solid gold bodies themselves and offer upgrades for the cheap watches. They already plan to offer gold plating for the cheap watch.
I'm surprised no one has made an argument from Apple's PoV. They have typically stepped prices in fairly even increments, but I could see a gold watch being priced with a huge divide over the most expensive SS model, simply to keep the [I]luxury[/I] aspect separate.
PS: If there is an adequate update path and they offered platinum I would have then consider such an expense, but I'm not a fan of wearing gold.
All this bandying about of Rolex prices is getting me depressed, I've got to bring my 1980's Submariner Date in for repair (it's started gaining an hour in a half hour of actual elapsed time): I am now expecting sticker shock. As it was my goto dive watch forever I'll just wince and get it done, but still.
Of course with their repair facility located on Fifth Avenue in NYC why should I be surprised eh?...
As to the Apple Watch, the bands look easily swappable so I expect there'll be a big market for Apple (and later others) providing extras.