Why the $17,000 gold Apple Watch might actually be too cheap

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Photo: Apple
Despite its hefty price tag, the 18-karat gold Apple Watch Edition might actually be too cheap. Photo: Apple

The tech world is completely aghast at the price of the gold Apple Watch Edition, which starts at $10,000 but is more likely to set buyers back $17,000 (plus tax!).

The pricing is baking everyone’s noodles. We can’t wrap our heads around a super-expensive watch that will soon be obsolete and is functionally identical to a $350 model. This is not how tech works.

But that’s the point. I wrote how the high-end Apple Watch winds me up — I argued that its very existence is antithetical to Apple’s democratic values. But after further research, it’s obvious that Apple knows exactly what it’s doing, and it’s very smart — even if I still don’t like the gold watch’s enormous price tag.

The Apple Watch Edition is a classic Veblen product. The outrageous price is the whole point. And the higher it gets, the more of them Apple will sell. It might even be priced too low.

Made of 18-karat gold, the Apple Watch Edition is the very definition of a luxury good. These types of items are never purchased for practical reasons. They are bought for a very specific purpose: to display the wealth of the owner. It’s all about status.

In economic terms, items like these are known as Veblen goods — items that increase in demand as the price goes up. Classic examples include a Rolls-Royce Phantom ($500,000), Hermes‘ Matte Crocodile Birkin Bag ($120,000) or an IWC Grande Complication Perpetual watch ($240,000).

The appeal of Veblen goods lies in their exclusive nature, their “snob appeal.” They are desired mostly because the hoi polloi can’t afford them. The higher the price, the less accessible they become to the mass market. Owning a Veblen product sends an unmistakeable message: “I’m richer than you.”

Veblen goods are named after the American economist Thorstein Veblen, best known for coining the term “conspicuous consumption” in his 1899 book, The Theory of the Leisure Class.

“Veblen goods are generally targeted at affluent individuals, have a very strong brand identity that is synonymous with luxury and are far more likely to be sold in upscale boutiques than in common department stores,” according to Wikipedia.

That might as well be describing the sales strategy for the 18-karat gold Apple Watch Edition. Tim Cook barely mentioned it during Monday’s keynote. But luxury customers don’t watch Apple keynotes; they’re too busy yachting. Apple already has a strong luxury brand identity, and has hired several executives from the high-end fashion world (YSL, not JCPenney). Apple is reportedly busy setting up pop-up watch stores in exclusive boutiques.

It’s not clear, but it’s possible the high-end Apple Watches won’t be sold in Apple stores at all. The target audience is not the people you tend to see at your local Apple store, but those who shop at boutiques in Paris, London and New York.

“In order to gain and to hold the esteem of men it is not sufficient merely to possess wealth or power,” Veblen wrote. “The wealth or power must be put in evidence, for esteem is awarded only on evidence.”

In defense of obsolescence

The tech crowd is bemoaning the fact that the Apple Watch will soon be obsolete. If the Watch is developed at the same pace of the iPhone, the second- or third-generation product will be much better than the initial models. Lots of techies on Twitter have suggested the gold models will likely be upgradeable, or that Apple will set up some kind of trade-in scheme.

This completely misses the point.

In the rarefied world of luxury, obsolescence is a feature, not a bug. The fact that the Apple Watch will be obsolete in a year or two makes it even more desirable to the luxury consumer. In fact, the quicker it becomes obsolete, the better.

Obsolescence makes it even more luxurious than items like analog watches or jewelry, which remain useful for decades. The luxury buyer will simply upgrade to the latest model, and stash the old one in a drawer. Or give it to the maid.

It’s an ostentatious display of wealth — and tech folks can’t wrap their brains around it. It’s not practical. But the tech matters not. It’s almost irrelevant.

Vertu has made a fortune selling super-expensive cellphones to the elite. Photo: Vertu
Vertu has made a fortune selling super-expensive cellphones to the elite. Photo: Vertu

Vertu, the luxury mobile phone maker, serves as a good example. The company was studied by Jony Ive, according to The New Yorker’s recent profile of Apple’s design guru, and could be a model for Apple’s strategy.

Vertu sells outrageously expensive mobile phones that are made of solid gold or covered in jewels. The phones are beautifully crafted but technologically backward. Until recently, its offerings were simple feature phones based on standard Nokia mobiles (Vertu was a spinoff of the Finnish company) that cost between $6,000 and $12,000, or hundreds of thousands for custom orders. It didn’t even have a smartphone until 2103, when it released handsets running Android that cost between $10,000 and $20,000, depending on bedazzle.

It sounds crazy, but the company is booming. It employs more than 1,000 — including many craftspeople — at its U.K. headquarters. Vertu phones are available in more than 500 stores round the globe, including 70 of the company’s own boutiques. It even has rivals like Bellperre from the Netherlands, Goldvish from Switzerland, and luxury phones from the likes of Christian Dior and the watchmaker Tag Heuer.

There a several similarities between Vertu’s and Apple’s strategies for selling spendy devices. The gold Apple Watch will be sold in the same boutiques that carry Vertu (Galeries Lafayette in Paris, Isetan in Tokyo, and Selfridges in London), where elite shoppers get hands-on service. Both companies employ precious metals and promise that their high-end products will be produced in extremely limited runs.

Designer Clive Grinyer, Ive’s friend and former business partner from London, said Vertu is succeeding because luxury customers haven’t been offered much choice in the mobile phone market.

“They proved that excellent manufacturing and care of a product (and then a few gemstones) resonated with customers,” he said. “Vertu showed that people do want to flaunt their luxury objects, overriding the technology, which is pretty basic in the Vertu…. Vertu customers aren’t that interested in technology and this is more of a desirable object than desirable tech.”

Until now, Apple has taken an approach that’s opposite to Vertu’s, offering products of “outstanding beauty and technical innovation at an affordable price,” Grinyer said. But with the Watch, Cupertino is taking a distinctly Vertu-like approach.

The high-end watch “gives a chance for customers who choose to express themselves in that way to do so,” said Grinyer, who considered doing design work for Vertu a few years ago, but passed because it was “too bling.”

There’s no shortage of potential buyers for such extravagant items. Bain & Company estimated the 2014 global luxury market to be worth $238 billion, with Chinese consumers the biggest and fastest-growing group. Apple is making a big push into China, which recently displaced Japan to become Cupertino’s second-biggest market after North America.

Still, Grinyer said the watch isn’t a “pure” Veblen product.

“The cost is linked to the actual cost rather than a markup to reflect its luxury status, which I guess would be pure Veblen,” he said. “But the effect is probably much the same. I think the gold watch reflects an attempt to embrace the drivers of different cultural mores…. The watch is playing to a wider audience and embracing other ways that people express themselves, whether in China, Saudi or Las Vegas. And that is what I find interesting and important in a post-Jobs world.”

When you look at it that way, the Apple Watch Edition isn’t priced nearly high enough. Maybe Cupertino should tack on an extra zero.

Deals of the Day

  • BoltmanLives

    Solution ….Volunteer to pay more.

  • Owen 

    Maybe they’ll release a 24K gold version for $100K… make all those well-to-do $10K purchasers feel like total losers unless they upgrade! :P

    • Alex Blaha

      lol, just sell it for the gold..

      • Owen 

        LOL. I can assure you that there isn’t even $5000 gold in that watch.

      • Maxim∑

        its solid gold not just a layer, probably 3-4k of gold in it and more in the non-rose gold one

      • Owen 

        Apple’s gold is a special blend of gold and ceramic material so volume wise there’s actually less gold in the watch case than other similar size solid gold watches. In any case there will be a massive markup over the cost of the base materials and the actual gold value will be much less than the retail value. So you won’t get much money back for the gold alone, relatively speaking.

      • Running Rampage

        Not really, The gold has that stuff in it to make it 18K and stronger, better to hold up being a watch then 24K.

        When you can buy a watch in the Million+ range and all it does it tell the time, $17,000 for a Apple Watch is nothing. It’s just a whole different world.

      • JD-MTL

        Here’s another way of looking at it. Many people who currently wear watches (and who have already graduated to the luxury segment) haven’t paid less that 10K for years now. Rather than seeing this pricy gold iWatch as offensive to the middle class (by out-pricing it), it can be seen as an attempt to “democratize the market” by bringing the luxury segment down to the level of the middle class consumer, by helping luxury segment buyers realize that the same piece of tech that appeals to the regular-Joe-apple-fan, is also the right choice for them. Effectively it actually re-enforces the choice of the middle class consumer, by demonstrating that the same tech is ultimately valued by consumers accustomed to spend 10 to 100 times more on their time-piece (who could choose any tech). The psychology seems to be equally effective in reverse.

  • dimithrak

    Very interesting perspective. Thanks. Good Read!

  • It is the peacock’s tail, functionally of little use, but it impresses the ladies. I’m buying a six pack of short sleeved shirts for when I get mine. Don’t want to hide it.

    • Owen 

      That brings new meaning to the term “gold digger” :P

  • I think Steve Jobs is flipping in his grave. This is somewhat disgusting. Apple has never seemed to be about making products for the elite. And it seems unfair that the only way to get a gold watch is to pay an ungodly price. Those hideous gold MacBooks will be available to everyone, though. It’s just disappointing to see this come out of a product line from Apple. And you know what’s worse? The people who are stupid enough to think that making a big flashy statement with their goddamned watch is going to give them any sort of relevance. It’s just meh.

    • Reagan

      Comparing the gold MacBook to the gold watch is not even relevant. Ones real and the other is not….. Bottom line, if you’re upset about the price of the watch and it makes you angry then the Gold Watch is not marketed at you anyway. Just stick with the sport sir

      • Then you buy me the damn gold watch, since obviously it’s not an issue for you.

      • GadgetCanada1

        You sound 5 years old whining why you can’t have what Billy has. Why the hell do you care what anyone else in the world wants to spend their money on? It’s all relative to how much money you have and what you can afford. The starving kid in Somalia thinks you’re disgusting for owning a computer, a house, a car, and a fridge full of food.

      • Sit down, queen. It’s not at all in regards to wanting the watch. Their Keynote event went from featuring a marathon and families within a third-world country to announcing the gold watch starting at $10,000. This is about giving power to a specific type of socioeconomic “class”. This is about how Apple, a revolutionary company, is perpetuating the stigma that those who can’t afford $10K for a watch just need to settle for their cheaper brands. It’s a statement being made that the middle class should be reminded of their place. This isn’t about color, it’s about raising an identical product to a “higher level” and then others are forced to “settle”. I’ve heard so many others say, “It’s not for me, it wasn’t made for me.” Why not? Apple has never been about creating a class war. And that’s exactly what this watch is doing. Drawing an even thicker, more defined line between those who can merely get by and those who have so much money they can wipe their ass with it. The products should remain universal and anonymous, as they have before. No one should have to be reminded of which tax bracket they fall into simply because they want a device in a different color. You see what I mean?

      • Nobody

        But you’re missing the fact that you _can_ get an Apple Watch that does exactly the same things for a price that most can afford. In that sense, there is no “class warfare” here. It’s only if you want a gold version that you need to be fairly rich. But that’s like arguing that a bar of gold or a diamond should be affordable by all.

      • You are right. So, what if I want a gold version and I’m not rich? What happens at that point? Should I just buy a different watch? This is what I’m meaning about people being comfortable with where they’re told that they stand from a monetary standpoint. (I see the point entirely that you’re making about practical function and cost, I’m just relation to the overcast of how gold is only being offered to those who are considered to be within a different “class”. And I don’t think it’s right. That’s the only opinion I’m voicing.)

      • Nobody

        I understand the point that it’s simply the fact that they’ve created a product where the whole rationale behind it is to be something which only certain people can afford. I agree, that’s something which goes against the grain of Apple’s products. However, you could also look at it from the standpoint that gold itself is an expensive material — similar to how using high-end components like a Xeon CPU or a FirePro GPU in the Mac Pro makes it significantly more expensive than a Mac Mini or an iMac (and thus out of the price range of most people).

      • Very true.

      • Victor Dweck

        Great writeup Mr. Leon, but it’s very important to remember that Apple is not simply in the tech market with the Watch, but the jewelry market. For the first time, they must DISPLACE an ACCESSORY that people have had for hundreds of years. To do so, they have to create a product line that is relevant to the watch market. Most watch brands have options that range from relatively affordable to relatively unaffordable. By creating a line with different price options and materials, they are actually doing what most watch brands do, and by that they are following the norms that the watch market has produced over the last thousand years.

        It’s Apple joining the club, which it has no choice but to do, since this club was created a long time ago.

      • cubanfool

        So they should sell the gold version for exactly the cost of what adding gold to the watch costs? Would that make you happy?

      • What would make me happy, Mr. Fool, is if you would stop approaching this concept with such a hostile undertone. This is about a technology company pricing an inch-wide piece of glass and leather in a higher category than some people’s cars. And about the way that people are in awe as it happens.

      • McSorley

        The bottom line is companies are already taking iPhones (for example) and putting precious metal/stone coverings on them to sell to very high end customers. The idea that a high end third party accessory could actually make more on an iPhone than the company who makes the iPhone should be something you have more of a problem with given your argument above. This essentially puts more of those dollars in the hands of the company who actually designed and built the product.

      • McSorley

        As if some company out there won’t create a gold watch cover to make yours look like the real thing for $99.

      • FootSoldier

        Wait one sec, Bro! So is having a Bentley any different. Should the Bentley price tag be lowered as a symbol of class unity. In fact, the Apple Watch should symbol the dismantlement of the classicism that you mentioned. There is nothing that makes the cheaper watch functionally different than the more expensive one except the gold, which is… Wait For It… More expensive! You of all people should be celebrating that such an influential company is showing that you can have the exact same functionality a rich person has, for less money, and cheaper materials.

      • I see your point, and you have a very valid view. What do you think of the Watch Edition?

      • Corvus

        Right! Last time i looked Rolex didn’t make a watch for the rest of us. Apple does.

      • cubanfool

        Television, the media, just living life.. reminds you everyday what tax bracket you are in…. Do you wear blinders when you go outside and someone driving a tesla or Ferrari LaFerrai drives by?

      • herbaled

        Wow … you do go on don’t you. Do you actually believe that Apple is creating a “class war” with the gold watch? Why are you so offended and take it so personally?

        If it’s OK for you to spend your money on what you can afford and want, why isn’t it OK with you for others to do the same?

      • ds9sisko

        Um, er, hasn’t one of the biggest (and most unfair) criticism against Apple has been that all of its products are “too expensive” for the average consumer/customer? Haven’t you — er ah — heard of that?

      • Reagan

        It’s not for me and that’s my point. I think it’s priced too high and guess what? It’s not marketed at me!

      • herbaled

        Oh … so you do want one, huh?

      • McSorley

        I wouldn’t want the gold one even if it was the same price. Stainless steel or silver for me when it comes to jewelry (including tech jewelry). IMO wearing gold reminds me of someone from Jersey shore.

      • Michael Smith

        How would you feel then if Apple also released the watch in MacBook gold (plated?)
        You are right, one would be real and the other not, you couldn’t tell by looking at them side by side, but you would know yours is the “real” gold one and that is what is important, right?

      • Shaun79

        I think this is an interesting point. People clearly like the “Gold” iPhone and many would want a “Gold” Apple Watch to match. I think a Gold coloured watch could happen in the future (for the poor people).

      • Maybe so. Very good point. What I continue to think of is that person who is working 40 hours a week for their pay and had hopes of getting a gold watch and then get a smack in the face with the news that it’s “only for the rich”. Again, another stint within the collective reminder that whatever she does or however hard she works, she’ll still always be just getting by and “just middle class”. I’m becoming more and more upset with the route that I see Apple taking.

      • cubanfool

        I actually think the gold watches looky tacky and rather feminine. I find steel and aluminium much more masculine metals. My wedding band is titanium.. I wouldn’t want a gold band.

      • I agree with you on that.

      • McSorley

        You mean the “poor” people of America not the real “poor” people.

      • I had thought they were doing that with the watch. No other gold Apple product is solid 18-karat. To me, personally, it doesn’t matter. I don’t like the look of the gold watch because I don’t care for gold jewelry. It’s not a personal battle for me, I’m indifferent at looking at the gold side by side for a watch that is more technology and social mingling than it is a timepiece. I just don’t understand why the team went this way.

      • cubanfool

        Why not? It will bring in HUGE profit margins from a segment of the population that can 100% afford it. I find this MUCH more ethical than charging $100 extra for 8 gb of ram in an IPHONE like they used to do. That was far less ethical since the middle class could do so much more with that $100 than the 1% who would use it as toilet paper.

        Now, apple can take that larger profits and build a safe self-driving car in 5 years that will save 40K lives a year on our dangerous roads. See how I flipped that ethical argument!

      • Yes, you should work for their PR team. Lol. :-)

      • herbaled

        I hope. Then my Apple stock will go even higher and then I can afford the gold Apple Watch. ;-)

      • Shameer Mulji

        “To me, personally, it doesn’t matter. I don’t like the look of the gold watch because I don’t care for gold jewelry.”

        So why the hell are you complaining for nothing? You don’t like gold don’t buy. If you can’t afford gold, don’t buy. Should Rolex lower its prices because you can’t afford one of their solid 18K gold watches? No. Raise your game.

        And if you think the Watch Edition Gold is expensive, wait till Apple releases a Platinum version. It’ll knock you off your rocker.

      • Michael Smith

        At this point I don’t think Apple will be releasing a Platinum version and they will likely drop the gold by the next generation. From the comments around here and everywhere else, the gold watch is a joke, anyone wearing one will be ridiculed and laughed at. Apple’s foray into the high end luxury watch arena is already over. They may do well to sell what inventory they had to Dubai, but the rest of the world isn’t falling for it.

      • McSorley

        The alternative is companies like GnG, Louis Vuitton who make $2k – $100k iPhone cases for example make more money on a individual Apple product than Apple does.

    • aardman

      The people, the guys at least, who are stupid enough to think that making a big flashy statement with their goddamned watch is going to give them any sort of relevance? They are more likely than you and me to be squiring drop-dead, super model-gorgeous women around town. That’s just the way of the world. If that’s the type of woman you go for, you better start adorning yourself with the complete kit, gold smart watch and all.

    • Shaun79

      “And it seems unfair that the only way to get a gold watch is to pay an ungodly price.” What!? lol It’s 18 Carat Gold for God sake. Plenty of people will be offering Gold anodizing so you can get your cheap fake Gold Apple Watch if you really want one…

      • I actually don’t want a gold watch. I just think those who would like to have the choice of gold coloring won’t have that option because of the price. The iPhones and MacBooks are the same price for all three variants. It just seems that there is too much focus on a standard of wealth, rather than a functional watch from Apple that just so happens to be in gold.

      • Majipoor

        And what about those who want the option of red coloring? Even the richest people won’t be able to buy one!!

        Seriously?

        “there is too much focus on a standard of wealth, rather than a functional watch”

        The features of the $350 model are the same.

        I would be upset if the Watch Edition would provide more features than the Apple Watch “for the rest of us”. Which is not the case.

      • Michael Smith

        Wouldn’t that be interesting, a red version for $20k. It will make those gold owners envious!

      • Made of blood diamonds, I hope? :-)

      • Majipoo,

        You have a valid point about people wanting a red watch, but the point I was making was that all watches should be the same price, if not within a $50-$100 price range of each other. There should not be such a radical difference in price between the standard Watch or the Watch Edition. $549 vs $10,000 creates a dissonance and reinforces the image that the elite will not even have to wear the same clothing or as accessories as us. It’s de-humanizing and people are all too comfortable to say, “It’s not for me,” when in reality this company has always designed amazing products for a wide range audience.

      • Majipoor

        “all watches should be the same price”

        But Why that? How a $10k Apple Watch change Apple philosophy for “normal” customers? Apple is just extending the product to a new niche (but very profitable) market, but the other models are typical Apple product with typical Apple price.

      • I suppose so.

      • herbaled

        Those with a healthy self-image and self-worth aren’t “dehumanized” so easily.

      • Shaun79

        If people want a 18 Carat Gold Watch they will have to pay 18 Carat Gold Watch prices. Simply as that. The 1% need watches too…

      • Lol. I suppose they do. :-)

    • Ken Kotch

      First, Mr. Jobs no longer runs Apple. No disrespect to him but what he would think or would not think has nothing to do with reality. In fact, Cook told the story where Jobs asked him not to consider “What would Steve do” but to do the right thing.
      As for the gold- for a watch connoisseur who collects high end and exclusive watches, $10-17K is a drop in the bucket. It may be a show of how much money they have or they may just like high end things and have the means to have them. It doesn’t make Apple or those purchasing the watch wrong or irrelevant.
      If you don’t like it, don’t buy it. If you want it and can’t afford it, too bad. I want a 1964 Austin Martin DB5 but can’t afford one so I have a VW.

      • Michael Smith

        I’m pretty sure any self respecting watch connoisseur and collector is not impressed in the least by the gold Apple watch. It would be like a car collector who desires a 64 Astin Martin DB5 being impressed with a VW with a gold paint job.

      • Spot on, Michael! And my point exactly! Thank you! :-)

      • Majipoor

        No, this is not correct because the Apple Watch Edition is not “gold colored”: it is actual 18k gold, the same chemical element used for some high end Swiss watches.

        I agree that watch lovers will not be impressed by the Apple Watch Edition because what they love is the mechanical parts and not the material. But it is not a problem because Apple do not target those connoisseurs, but rich people who purchase Swiss gold watch because they are from Switzerland and are made of gold. And there is plenty of such customers.

      • Michael Smith

        People keep saying its gold as if that means anything to the price of this watch. The markup is solely based on perceived value not the value of the gold.
        Who knows how much actual gold is in this watch.
        from the technical jargon, it could be basically a gold colored alloy with some gold in it for color.
        It is certainly not pure 18k gold. Its gold that has been “matrix” hardened by adding a filler material like ceramic to fluff it up. So that 18k gold could be diluted by as much as a 3rd or more. I wonder how much actual gold is in the watch, $250 worth? less?

      • Majipoor

        FIrstly, “pure 18k gold” makes no sense.

        “from the technical jargon, it could be basically a gold colored alloy with some gold in it for color.”

        Absolutely not; you apparently have no clue on what 18k means.

        18k = 75% gold (element Au which is the same “gold” wherever you are in the whole Universe) and 25% whatever else (24k is pure gold, 12k 50% gold).

        A 18k gold high end Swiss watch is 75% gold exactly as the Apple Watch.

        Now how much gold is contained in an Apple Watch Edition is 75% of the mass of the body. Some have estimated it to being worth $1500. But it is more or less the same (depending of the weight of that watch) for any high end Swiss watch.

        But as you said correctly, the price of gold jewelry is not directly linked to the price of the gold. Gold jewelry is only “very expensive” because it contains mostly gold which is not the case for cheap jewelry which often contains no gold at all even when gold colored (other alloys containing typically copper are “gold” colored).

        So, a “paint gold” or “gold colored” object contains usually 0% gold ans some copper.

      • Michael Smith

        I was being facetious when I said it could be gold colored gold.
        If my understanding is correct, Apple’s gold is not a gold alloy but a gold matrix composite. Apple is mixing gold with low density ceramic particles which don’t have much mass but take up a lot of space, by mass it will still be 75% gold but when poured into a mold the “matrix” filler ingredients take up most of the room. This allows them to make a harder material and use less precious gold in the manufacturing of the watch.
        That is why I was curious about how much actual gold was being used in the watch because I have read some by some estimates this process uses a 3rd less gold on top of Apple’s already amazing manufacturing tolerances, the shell casing of the Apple watch likely doesn’t have much volume to begin with.
        Still it the price of the watch has little to do with the cost of the gold. Its a trick to get people to think its worth the additional markup and to validate their decision to buy it.

      • herbaled

        Actually 18 karat gold is already diluted by 25% silver and copper. Only 24 karat is pure 100% gold.

    • Kendall Tawes

      Isn’t this a bit Apples and Oranges. Actual gold cost quite a bit of money versus the gold coloured anodised aluminium of the MacBook, iPhone, and iPad. It’s not the same thing. Also nearly every watch company sells some watches at high price points. Apple didn’t want to be another Casio, they wanted to be the new Swiss who sell watches at many price points. Rich people will spend the ridiculous amounts on gold watches regardless of Apple’s $10,000 Watch Edition. Also Apple is making the $350 Watch with the same tech specs as the Edition. So comfortable middle class Joe Blow and Richie Rich can spend their money and get the same basic watch without breaking Joe’s bank and allowing the rich jerk to feel superior. As long as Apple keeps the average person in mind I really have no problem with this. It’s not like a Swiss watch and a Swatch an Watch is an Watch. My $350 isn’t for a lower quality device it’s just for a cheaper band and case.

      Also wasn’t Steve Jobs at the time of his death building a $120 million dollar yacht he designed. Wasn’t one of the first projects of Jonathan Ive the TAM or Twentieth Anniversary Macintosh which was reduced to $7,499 after originally priced $9,000 before release including a concierge that would arrive in a limo to set it up. The TAM basically had the specs of a $3000 Power Mac 6500. This isn’t the first time they’ve released premium products and there have been plenty of Apple devices clearly targeted to the rich. This is perhaps the most blatant but watches have been that way since their inception. If I buy one I’m buying a Sport quite comfortable in the knowledge that all I’m missing out on is shinny metal.

      • Kendall, you have a very valid point and you are right. I had also forgotten about those ungodly TAM models, but you are correct. Perhaps the biggest sting is the publicity that the Watch Edition is getting. But you are right. I suppose this ties into a bigger issue for me, where I feel like we’re always being lumped into the “rest of us” category by the government and politics and I’m just not wanting to see Apple start that, too. It hit close to home for me because I’m so passionate about Apple products. Thank you for bringing that up. :-)

      • Majipoor

        I am also passionate about Apple products since 1989 and I am absolutely not worried about Apple forgetting the rest of us.

        The Apple Watch Edition is just a way for Apple to make more money from a very limited set of people who are after luxury items (think China for example) and also a way to give the whole Apple Watch collection a premium image compared to the competitors.

        Think about it one second: what is the overall feeling concerning the Apple Watch collection for normal people compared to the Samsung smart watches? Or even the Motorola?

        My feeling is that many think that the Apple Watch is a really premium collection (thanks to the Apple Watch Edition) and that they are lucky because they can afford the $350 or $500 or even $1000 models which have exactly the same features as the Edition and are as polished, except they are not made of gold but of a beautiful “special” alloy of steel of aluminum. Why would the normal people be sad not to be able to buy a gold Apple Watch? Most prefer steel anyway (I do).

      • Brandon Franklin

        I think its this shift in perception that people are struggling with. Think of this way… take rolex for example. For all intents and purposes I cant afford one, so what do i do when I see their shop in the mall?… I keep walking, I know I have no buisness in their so why stop? And thats not to say there’s nothing I couldn’t afford, maybe a keepsake or a plaque or something… but you know what, I’ll never know. Apple could be in danger of this happening to them. Then hows the “well its not targeted at you” pholosophy going to work for them. Its sort of like the ipod/iphone “halo” effect in reverse. If people perceive apple as to high end then they become the last option for a lot of people. Lets be honest apple wasn’t shit until carriers started subsidizing their phones(ex. Their stock was around $80 when the 3gs hit the shelves) and without all those “low brow” customers their whole ecosystem implodes. Now it appears apple is aware of this by the reports that the edition watches wont be anywhere near an apple store and are probably only be sold in high end boutiques and jewelry stores. We’ll see. But people are not wrong in feeling left out even if thats not the case. Think of it like going into an old abandoned house late at night, even though you know its not haunted you cant help but feel creeped out by it. Apple could have avoided this by just releasing it separately and calling it a LIMITED edition with a small production run(which they kinda have but in a weird roundabout way that has seemed to alienate some customers) that way it is just a short bullet point on your local news instead of lined up next to the other warches taunting us.

    • FootSoldier

      You guys say this every year. What do any of you really know, about Steve Jobs. This is more than likely exactly what Steve Jobs would have done. I bet if Steve Jobs would have passed before the release of the iPhone, we would have heard the same thing “Steve Jobs is flipping in his grave”. This watch is being made BY THE PEOPLE THAT SPENT DECADES MAKING THINGS WITH STEVE JOBS. If anyone knows what Steve Jobs would have done, it’s these guys, not you. Hell, there the ones that usually changed Steve Jobs mind on most of his decisions.

      If Steve Jobs is flipping in his grave, its with excitement. Apple is becoming exactly what he wanted it to be. There pushing the envelope with the new Macbook (all his style), and making products for people, not just GEEKS. Which is the reason Apple has ever existed.

    • Quit whining. You can buy an Apple Watch Sport for $349 which has the exact same functionality, storage, etc. as the $17,000 Edition. Kudos to the people who have the money to buy whatever the hell they want and better yet to rub your nose in it. Pathetic, poverty mentality. Why are dumb, poor schmucks the only ones brilliant enough to have discovered that wealth is evil?

      • Shut up, Nick. That money could be spend better elsewhere. Poverty mentality? Do you feel that a $10,000 (entry model) watch is the best thing you could do with it? I’m looking at it from a practical aspect. If you have money coming from every orifice then you should be doing something better with that.

      • Keep replying to every single comment instead of making money and creating a better life for yourself. Its none of your damn business what I or anyone else does with their money. Your “practical aspect” point of view is why you’ll never be able to afford this watch even if you wanted to buy it. Why do you hate rich people so much? Unless you’re rich and can show some examples of “doing something better with that” your advice is garbage.

      • I do not hate the rich and I do not want the gold Apple Watch. And if you’ve got the time to monitor my comments, Nicholas, then you can’t say much against my defending my point. Either way, the point is being missed, and honestly I’m just tired of debating a topic that isn’t being understood. Have a good evening.

      • Shameer Mulji

        No, you don’t hate the rich. You just hate that you’re not rich.

    • michaelsanchez

      False – Apple has ALWAYS been about making products for the elite, far more so than any other tech company. Comparisons to companies within its own industry is all that is relevant.

    • herbaled

      It’s not like Apple is selling only the gold watch. Actually almost all the Apple Watches are far less expensive. So there’s no need to get self righteous and upset because they’re offering a gold watch for those that want one.

  • leon

    That’s insanely great! I felt the same way when I got my fake Rolex.

  • abc905

    “It didn’t even have a smartphone until 2103”.

    Wow.

  • aardman

    Somebody beat me to “peacock’s fantail”. Read a book on evolutionary biology, Mr. Kahney. That explains everything about the ultra-high end luxury market. It’s all about getting booty.

    • GadgetCanada1

      Do you own any American Eagle (peacock fantail) shirts or do you only buy shirts from Target? The rage against a high disposable income is funny. People can be so jealous. Who gives a frick on how much money anyone spends on anything.

      • Michael Smith

        You are right. It’s about disposible income, some have more than others but its not like the gold watch is any better than the sport. Just like a T-shirt from Walmart looks just as good and feels just as comfortable as one you might pay $200 for. The law of diminishing returns applies, its not like rich people are living a better life, things just cost more for them.

  • John Tremendol

    Amazing Article giving a new prespective on the strategy, but the spelling mistakes you made are downright stupid.

    • rps

      And now will you tell us about capitalization?

      • GadgetCanada1

        I had to laugh at that burn

  • Greg_the_Rugger

    OMG! You mean there are people who don’t use coupons at the Piggly Wiggly and pay full price. Loardy!

  • Michael Smith

    Excellent article, well written, informative with just the right amount of snark.

  • Its quite funny how just about everyone is assume that Apple will have a new version next year. It may last quite a few years before a new watch is released.. just saying…

  • Tinny

    Will it increase in value in some years? Like the first iPhone? Maybe, event it won’t be a success?

    • ♦[PharLeff]♦

      Find out on the next Dragon Ball Z

  • Andy

    Great article!

  • Jordan Baker

    $170,000.00 hahaha

  • Ruurd Pels

    Boy are you hoi polloi if you write ‘the hoi polloi’…

  • cubanfool

    I think it’s Robin Hood-esque of Apple to create this $10K-$17K watch. They are padding their profits on the backs of the 1% that are arrogant assholes. (Not all of the 1% will buy this.. Buffet wouldn’t). But I see no problem with making money off a Kardashian-types and using that money to innovate better products for the rest of us. When in 5 years they have a self-driving car that saves 40K lives a year eventually on our dangerous roads… It will all be worth it.

  • HotelQuebec

    Vertu and high end watches are made in Europe. As long as the Apple Watch is made in China it’s not Veblen.

  • CelestialTerrestrial

    Look at the MSRP of the Rolex Link Bracelet in SS, they charge $1200, Apple’s Link Bracelet in SS is about $500. They are about the same quality, only the Apple one is easier to add/delete links and it’s easy to switch out the bracelet for another watchband.

  • CelestialTerrestrial

    Yeah the super rich will pay stupid amounts of money for high end products because they can and they want things that are solid gold, platinum, diamonds, etc. etc. and are small production products because it makes them feel more special that only a small number of people can possess such a product. Well, ya go around once in each lifetime, so why not splurge? If you have hundreds of millions or billions of $$, are you going to be wearing a $200 plastic smart watch? I think not.

  • jjredfish

    Apple Watch Edition was not created for the wealthy. It was created to help people think of the rest of the Apple Watch line as luxury/jewelry. People of average means can’t afford a gold Apple watch, but they can afford a Sport watch that “would be worth $10,000 if it was gold”.

  • SanFranDisco

    DoesApple,despite Ms.Arhens hire, really need to “burnish”its gold inclusion time keepers to vendors that sell LMVH materials or the like, or other greedy corporations that further divide the haves from the have-nots? And yes I think the people that are in the market for these toys aren’t listening to any Keynotes, since they probably ARE on their yachts and in their other toy worlds.
    Apple could start being more philanthropic and just start giving away all their cash hoards that they seem to neither pay taxes on, nor produce any middle class jobs other than in retail or on their spaceships. Jony I lost you when you moved from Twin Peaks and arrived at your Pac Heights home in the chauffeured Bentley you will soon get dropped off to. Maybe Laurene on her yacht can pop into Monaco for a few for grad gifts!

  • Ole Eichhorn

    Apple should have started a new brand for luxury products, like Toyota did with Lexus and Nokia did with Vertu. Apple has a strong brand but it doesn’t stand for luxury, which will dilute the Veblin effect.

  • It’s a good thing those “here’s to the crazy ones” ad campaign ended long ago. A company is free to do what it wants (per stockholders), but that said, the ethos now oozes a sense of “better than thou.”

  • Juan Antonio

    Typo:
    “It didn’t even have a smartphone until 2103”

  • amcgrath

    Macs have always been considerably more expensive than other brands, but over time this has been overcome by the fact that they work better and last longer – people have accepted this, even when a couple more gigs of RAM can cost hundreds of dollars.

    The pricing on the watch destroys that notion, as a $17k watch will do nothing that a $400 won’t – nor is there $16,600 of extra cost to manufacture or in materials . Apple have blown the perception that allows Mac buyers to justify the often ridiculous premiums that they pay.

  • Owen 

    I don’t care how much Apple charges for their gold watch. Even if I had the money to buy a $50K Rolex I wouldnt. Gold jewellery just doesn’t interest me at all. What I’m more annoyed with is the 500% markup/profit margins that Apple has placed of the Stainless steel model. In cost and materials the stainless model would only be about $50 to $100 more than the sport model. The sapphire glad only costs $16, and a stainless alloy doesn’t cost much more to make than an aluminium alloy. The Apple Watch sport costs around $100 more than comparable competitor’s watches, but I’m sure it will have better build quality so I don’t mind paying a small premium for that, but paying 500% more for nothing more than “status” is just ridiculous! Especially considering that I’ll need to upgrade it in a year or two if I want to stay current with the technology.

  • JD-MTL

    Here’s another way of looking at it. Many people who currently wear watches (and who have already graduated to the luxury segment) haven’t paid less that 10K for years now. Rather than seeing this pricy gold iWatch as offensive to the middle class (by out-pricing it), it can be seen as an attempt to “democratize the market” by bringing the luxury segment down to the level of the middle class consumer, by helping luxury segment buyers realize that the same piece of tech that appeals to the regular-Joe-apple-fan, is also the right choice for them. Effectively it re-enforces the choice of the middle class consumer, by demonstrating that the same tech is ultimately valued by consumers accustomed to spend 10 to 100 times more on their time-piece (who could choose any tech). The psychology seems to be equally effective in reverse.

  • Dave

    The author of this article is a fucking moron