We’re still waiting for the final pricing details on the Apple Watch, but if recent reports that Apple plans to sell one million gold Edition units a month are true, Apple Watch could wreak havoc on gold prices and do who knows what to the global economy.
Josh Center at TidBits has done some math on Apple Watch and estimates that if production rumors are correct, Apple will be bidding for a third of the world’s annual gold supply to make enough gold watches to meet demand.
To put those numbers in perspective, Apple needs so much gold it could turn the all 7,000 metric tons of gold stored at the Federal Reserve Bank of New York — you know, the one from the plot of Die Hard 3 — into gold watches in less than a decade.
Assuming the Apple Watch Edition contains 2 troy ounces of gold (2 troy ounces equals 62.2 grams), Centers estimates Apple would need 24 million troy ounces of gold per year for its watches. Or roughly 746 metric tons. About 2,500 metric tons of gold are mined per year, so if Apple uses 746 metric tons they’ll need about 30% of the world’s annual gold production.
Of course there’s a big ‘if’ here, and that’s whether the WSJ got production numbers right in its report claiming Apple aims to sell nearly one million Apple Watch Edition models per month. Those numbers sound suspect considering Rolex only sells 600,000 watches a year for an estimated $4.7 billion in revenue.
The price of gold is currently $1,200 per ounce, which would make Apple’s annual gold needs somewhere around $28.8 billion. Apple would need to store more gold per year than Rolex makes in sales. The annual sales of high-end Swiss watches was about 27 million in 2013. Apple would have to takeover 45% of the entire luxury watch industry to hit its mark. If history is any indication though, there’s one company that can completely dominate an old tired market despite pricing, and it’s Apple.
Even if you cut the projections in half the numbers are still mind-boggling. Hopefully Apple’s already working on a Scrooge McDuck sized vault to store all its gold.
Source: TidBits
Buster Hein is a freelance writer who lives in Phoenix, Arizona. Twitter: @bst3r.
19 responses to “Demand for Apple Watch could use up third of world’s gold”
Should Fort Knox be worried?
What the actual fuck…
I wonder how many MILLIONS (billions??) of pounds of gold are in the world? 1/3 would be substantial wouldn’t it? :)
Just proves how utterly absurd the wsj figures are on this. Idiots don’t think sometimes. There’s not suddenly going to be a quantum leap for gold watches, whether made by  or not.
I wouldn’t be so confident in that statement.
The Edition is pegged to be priced at around $10000 to $20000. It is unlikely that Apple will sell a million of them in the first month.
At that price, I would rather have the IWC Yacht Club.
Did you bother to check the gold price history before writing such a ridiculous article?
Gold has gone nowhere for the last two months. Apple would have had to stockpile a lot of gold, which would have driven gold prices up significantly.
And for an April launch, Apple is already manufacturing the watch. So…if they’re using so much gold, why are gold prices flat?
LOL Glab to see that at least someone knows how the real world works.
These articles about how many gold watches Apple’s gonna sell and how much gold they gonna need are incredibly absurd and I’m equally baffled that some people actually believe that crap. There are people out there who are gullible sheep who can’t think for themselves.
The “paper” gold price continues to be manipulated and the flow of gold continues from west to east. In addition, GLD and SLV etfs were set up specifically to drain physical gold and silver from the market. If apple has a plan it was in place years ago you can be assured of that. I can guarantee that they have been stockpiling gold strategically.
Absurd assumptions. Rarely I have read such nonsense (referring to the original wsj article).
This is a truly terrible article. They are projected to sell around 25 million total watches for the year. Around 85-90% of those are projected to be the apple watch sport or the stainless apple watch. They will probably sell more like 100,000 gold watches per month, which is nothing to scoff at by any means.
The other real problem with this article is that the watch will contain nowhere near 2 oz. For reference, a rolex watch body contains 13 grams or less than half an ounce. This sensationalist article doesn’t even remotely pass the sniff test.
I wonder if the author really knows what he’s writing about or believe it…
IMO because gold has been manipulated and detested for so long, (purposely so the physical metal could be acquired while dropping the paper price), we will begin to see positive gold articles because they will start the next mania (gold).
That’s assuming your Apple Watch and iPhone 6 and iPad Air 2 have real gold. I know some gold watches turn out to be fake. Gold painted.
did someone skip a decimal? two troy ounces of gold (or anything) would make one of these puppies the world’s heaviest wristwatch several times over. apple has a reputation for small, light products. 0.2 troy ounces is believable. 2.0 is NOT.
A fool and his money are soon parted… What a waste.
Something doesn’t sound correct. If the watches contain 2 Troy ounces each then they should be priced at a minimum of 2500 dollars at current prices. I would think that Apple’s pricing would include production cost plus the profit, which would make the real price closer to 3500 bucks.