Apple Watch Pricing: My Predictions

Apple watch three models

There has been a lot of speculation about the prices of the soon-to-be-announced Apple Watch. We know that the Apple Watch Sport will start at $349, but have no idea about the prices of the other models. Some people are speculating that the Apple Watch edition will cost $10,000, or even $20,000. I don’t think so.

Here are my predictions for prices for the Apple Watch.

Apple Watch Sport: We already know that this model will start at $349. This includes a basic, plastic watchband. It’s not clear whether Apple will charge a different price for each of the two sizes; most people think they will, but I find that a bit odd. It would be, in essence, a sex penalty: if you’re a man, with a larger wrist, you’re likely to buy the larger model. Should you have to pay more? If there is a difference in price between the two sizes, I don’t think it will be more than $50, so the larger model would cost $399.

Apple Watch: The middle of the line Apple Watch differs from the Apple Watch Sport in its casing (stainless steel vs. aluminum), and its crystal (sapphire vs. glass). As such, it will be more expensive. But I think it will come in at under $500. Again, it’s not clear whether the two sizes will be priced differently, but, if they are, think $499/$549. However, I assume that the base model will come with a plastic watchband; others will be add-ons. Expect watchbands to start at $100, and maybe cost several hundred for the fanciest ones.

Apple Watch Edition: This is where there’s a lot of speculation. Apple is clearly targeting the luxury market with this watch, advertising in magazines like Vogue, and planning (according to rumors or leaks) pop-up shops in major department stores. However, there’s nothing special about the Apple Watch Edition, other than its gold case, and what seems to be a stock leather band.

The Apple Watch Edition is not a luxury watch; it’s just a gold-cased version of the cheaper watch. There’s nothing exclusive about it, nothing special. It’s not like more expensive watches where you pay for complex machinery. Yes, there is gold; that will make it more expensive than the other models. But not that much. Estimates of the cost of the gold suggest that the metal would cost less than $1,000.

As such, I think the list price for the base model Apple Watch Edition will be $1,999. There will certainly be a price differential by size, and it could be a couple hundred dollars for this version. In addition, the watchbands will cost as much as several hundred dollars. There’s just no reason to pay more. I repeat, this is not a luxury watch; this is a smartwatch with a gold case.

So, to sum up, here are my predictions:

Apple Watch Sport: $349/$399

Apple Watch: $499/$549

Apple Watch Edition: $1,999/$2,199

Do you think the Apple Watch is attractive? I’ve set up a poll asking that question.

19 thoughts on “Apple Watch Pricing: My Predictions

  1. We don’t “know” that the Apple Watch Sport will start at $349. What Tim Cook actually said is that pricing for the Apple Watch will start at $349.

      • I think it is possible that Apple may pull a surprise next week and announce the Apple Sport models at less than the announced $350 price for the base Apple Watch. Unlikely? Perhaps. My point is just that we really don’t know. I do think Apple is smart enough not to price the basic Apple Watch far higher than the expectation Cook set.

  2. Have you seen the graphic going around about pricing? If it’s really a leak then the top model with gold bracelet will sell for $20k. In general that price list if true foregrounds that much of the high-end pricing is based on the band alone. I think that would break the illusion that you are paying for higher watch quality when you buy a luxury model. My prediction is that 99% of sales will be of the lower 2 models. (Not much of a limb I’m out on there.)

    • I would expect the base price to be the price of the watch and the basic band, which is shown on the Apple website. For the first two models, that’s a plastic band; for the gold model, it’s a leather band. I expect that bands will be sold separately, but you may be able to order a watch and band as a build-to-order. But I can’t imagine that a band would have more than a couple thousand dollars worth of gold (a couple of ounces). And, remember, the watch body is 18K; the bands will be 18K or less, so it’s still not that much gold.

      • I think you’re severely lowballing it.

        Gold is very heavy. If Apple comes out with a gold version of their steel link band (which seems very likely), it’s going to weigh 3-4 ounces. Cf http://forums.watchuseek.com/f23/rolex-worth-its-weight-gold-568254.html where a rolex with gold flex band is said to have 150g of 18k gold in it, and figure 1-2 ounces for the watch body.

        Also, you need to remember that gold is a commodity whose price yo-yos with the whims of the market. To avoid losing money when the price goes up, it’s SOP in the watch industry to build in a considerable fudge factor when calculating the cost of the gold in a watch. Also the mere fact that it’s made of gold will increase all of Apple’s other costs — they’ll have to hire security for every step from the case supplier to the retail store, and pay for bonded couriers to transport the cases and finished watches. And forget about having it built in China by low-wage workers. All of that will inflate the base price to Apple, before they apply their markup.

  3. With Gold selling for $1000/oz and Apple’s world-famous profit margin of 30% I think that the gold alone would account for $2000 markup above the base model. The sapphire crystal will add another $100-$200 markup. The wristband, another $100-200.

    So… the lowest I’d wager would be $2499, with some configurations hitting the $10K mark.

  4. I really don’t know. Explain why a cotton nighty can go for $10,000? Obviously it’s not about material cost or even difficulties in manufacturing. People who would buy it don’t care how long it will last. What makes them special and exclusive is entirely artificial. That it’s more expensive than others can afford, even. I think there is a threshold for what normal people will spend and once you reach pass that market you might as well go all out.

    I think there is a strong urge to rationalize the cost in function or material but there is a market that sees the value of goods differently.

  5. This is the worst logic I have yet to read on this particular subject. Upgrading a Rolex or Chopard to a gold case in the EXACT same model will set you back between 10 and 30 thousand dollars. The amount of gold or the price thereof is meaningless – the pay is for the image and the bling.

    You can’t think about cost of materials or production or anything else in the stratospheric market that Apple is targeting with the Edition. It’s simply what the market will bear and what people are willing to part with for the sake of being in that game.

    It’s also madness, btw, to pull out the canard that high-end watches last for decades, if not centuries. Yes, they do. And the Apple Watch will be obsolete (internally, anyway) in 48 months max. But will the kind of people who can drop $10,000 on a watch care? No, not at all. They will just buy another one. They aren’t like us … and as long as they are involved, logic that doesn’t take that into account will always come up empty.

  6. The gold content estimates of the Apple Watch Edition are wrong. Karats are determined by mass, but people are estimating by volume. Apple has a patent on gold metal matrix composite that allows them to have half the gold volume in their 18k gold vs. conventional 18k gold. http://veg.gy/ZhMF2

    • Wow…you’re right. Bonding with a ceramic is *genius*…let’s them make 18K gold with less gold than normal for the area the whish to cover, reducing overall mass…extra hardness since they wouldn’t be using as much metal for the volume…thus making mass-production and “affordability” actually…attainable.

      I guess that’s what the “Switzerland should be worried” quip was about…pure effin’ science. Wow.

  7. I think the mistake in your logic is assuming that the Apple Sport Watch is not a luxury watch. The Edition is a luxury watch through and through; the Sport is a luxury watch contained within cheaper, more mundane materials.

    Making affordable luxury items has been a hallmark of this century’s Apple. Don’t know how well they’ll do with unaffordable luxuries like the Edition, but it will be interesting to see them try.

  8. “it’s just a gold-cased version of the cheaper watch. There’s nothing exclusive about it, nothing special.”

    That “just” is doing a lot of work. Speaking of “Just”, the two-tone and gold versions of the Rolex Datejust also have the same movement as the stainless steel one.

    More to the point: the Pulsar P2 cost $395 in 1973, more than a Rolex Submariner at the time. The gold-cased P1 cost $2100, more than a car. Both were technologically obsolete within a couple of years thanks to the arrival of LCD.

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