Following a tweet that I read yesterday, I’ll give an update on my thoughts (1, 2) on the price of the Apple Watch.
Abdel’s point is very valid, and I think its something that Apple has deeply thought about. The thing is, and I mentioned this before, unlike watches in general, the Apple Watch will live and die by its ecosystem. Apple has to ensure that the ecosystem will be vibrant and profitable for developers, and the way to do that is to maximize the number of users who are willing to spend a dollar or so for an app. If the price of the Edition is so high and the design of the Watch not appealing enough for women, then the Apple Watch as a whole may not attract enough female users.
I’m certain that this is not what Apple wants, and they would push hard to make the Edition affordable, at least for the majority of women in developed countries.
Then the question is, how low can Apple possibly go?
This depends on how much gold is used in the watch. In my first article, I quoted a teardown of a Rolex gold watch;
- Case ring weights 18.5 grams. Contains 13.875 grams of pure gold. It has a value of $178.43.
- Case back weighs 7.21 grams. Contains 5.41 grams of pure gold. It has a value of $69.57.
- Bezel weighs 5.30 grams. Contains 3.98 grams of pure gold. It has a value of $51.18.
- The bracelet weighs 68.85 grams. Contains 51.64 grams of pure gold. It has the most value at $664.09.
- The total value of the pure 24kt. gold in this Rolex President is $963.27.
There’s actually a better page here which shows you what each part looks like.
Comparing the Rolex watch to the Apple Watch, we can see that the Apple Watch does not have a gold case back or bracelet or a bezel to hold the glass in place; it only has the case ring. Also, although hard to be certain from just the photos, it’s likely that the gold in the case ring is also much less than a Rolex because the face of an Apple Watch is almost entirely the screen
It looks like the Apple Watch would only use a very small fraction of the gold in a Rolex. I suspect that Apple is purposely using as little gold as they can without sacrificing the design, which is in direct opposition to the Rolex which is trying to stuff in as much gold as possible. I would guess that Apple is only using at maximum, 15 grams. Maybe much less. The fact that people who actually wore the watch found it to be very light, might be a hint in this direction.
This would suggest that, at today’s gold prices (~40,000 USD/kg), the price of using gold will be something like 600 USD. Therefore, I think that it’s quite possible that Apple could make the Edition less than 1,500 USD.
I actually expect Apple to try even harder to further reduce prices because I think that it is a strategic imperative.