Home The Apple Watch Makes Its Play For The One Percent

The Apple Watch Makes Its Play For The One Percent

At Apple’s “Spring Forward” press event Monday, CEO Tim Cook confirmed retail availability and pricing for the company’s much-anticipated Apple Watch. 

On the low end, the cheapest device will be an Apple Watch Sport with a 38mm screen for $349—which is on the pricier side of the typical range for smartwatches these days. At their most expensive, the 18 karat gold watches in the Edition category start at $10,000 and goes up from there, depending on the options people select.

The major difference between the models, other than fabrication and materials, is … well, nonexistent. In essence, it means Apple is turning itself from a technology company into a luxury goods company. Sort of.

Watching Apple Hit Up Affluent Buyers 

Apple makes billions on the premise that it knows how to design technology products that people want. Too bad most won’t be able to afford its new smartwatch.

Renowned blogger and Apple insider John Gruber noted that the company’s devices have never been cheap — the first iPod cost $400; the first iPhone sold for $600 before dropping to $400 a few months later; and the company’s first iPad sold for $500. Later, it introduced the iPad mini, which sells for $400.

The context sets up a contradiction: The base model Apple Watch is the company’s cheapest mobile device yet. But when it launches on April 24, it will cost more than the average smartwatch at retail on the low end—and will serve up a Vertu-worthy extravagance on the upper range.

This positions the watch as less of a gadget than a luxury product, with models and prices distinguished by fabrication: aluminum alloy, stainless steel and 18 karat gold.

That’s a different tack, even for Apple.

The Differences Are Skin Deep

Usually, tech companies—Apple included—base product classes on distinct hardware specifications. Various gadgets tout more memory, bigger storage capacity, larger displays, better battery and such, to justify pricing variations. It’s the same play Apple made with its iPhone 6 and 6 Plus.

Not so with the Apple Watch. No matter which people choose, they will get the same device, at least internally—from its supposed 18 hour battery to the microphone and speaker that will allow people to place calls from their wrists. They all boast the same software that runs Siri, connects to iPhones and hinges on iOS 8.2’s new Apple watch app for application downloads.

On the outside, the differences are skin deep:

  • The Apple Watch Sport, encased in an aluminum alloy in either silver or space gray, will start at $349 for the 38mm watch and $399 for the 42mm model. 
  • Apple Watch collection features stainless steel in two choices—traditional and space black—starting at $549 and going up to $1049 for the 38mm version. The 42mm device will cost $50 more. 
  • At the highest end, the gold Apple Watch Edition, whose companion straps will also feature solid gold buckles, starts at $10,000. Other options will tack more onto the price.

The move seems like a gamble on Apple’s part. If the company is in the luxury goods market now, it needs to cater to that consumer psychology. Instead, it seems to be half in and half out, as it straddles a hazy line between early adopting budget shoppers and an affluent clientele. 

For the price conscious, the “cheap” aluminum and mid-tier stainless steel models will likely be too expensive. For wealthier customers, the mere availability of less-expensive variations might be enough to sully the watch’s prestige. Had the company gone decisively down one road or the other, the proposition might have been clearer.

Hard Out There For A Luxury Good

It’s a tricky balance that, for instance, high-end car makers have contended with for years. Companies such as Mercedes Benz and BMW are finally seeing success with less expensive cars for younger customers, but it took time. They also started with long-established luxury brands and only eventually branched out into lower-end offerings. They didn’t try to establish their luxury cred while catering to the masses at the same time.

In that sense, Apple’s approach seems risky. But plenty of folks hope the company can pull it off. More than any other, this smartwatch’s success has potential to lift the whole nascent wearables industry. 

In other words, there’s a lot riding on this wee wrist gizmo, and whether it can popularize the smartwatch product category—on either end of the market. 

Pre-orders for the Apple Watch start on April 10, and starting then, demo units will be available for retail shoppers to preview the device. Units will ship April 24 in select North American, European and Asian markets. 

Image via Apple

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