comscore Why Apple's $10,000 Watch makes sense

Why Apple's $10,000 Watch makes sense


Last night Apple finally answered one of the biggest questions on everyone’s mind – what would its luxury Apple Watch Edition cost. Early estimates ranged between $2,000 and $20,000 but the general expectation was it would be priced around $5,000. Apple blew everyone’s mind by announcing that the 18-karat gold Apple Watch Edition would start from $10,000 and go up to $17,000. But one question Apple didn’t answer was how it would service customers once the Watch becomes obsolete a year or two down the line. Also Read - Common marketing gimmicks that brands should avoid to exploit consumers

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The thing with technology is it evolves much faster, with refresh cycles increasingly measured in months and not years. Unlike an expensive luxury watch, which lasts for years and is generally passed on for generations, the same cannot be said about the Apple Watch. Also Read - Apple in tussle with Russian govt over App Store payment options

Luxury watches are more about form than function, for the Apple Watch Edition, the form and finish is the luring factor. The heart of the Watch, however, is the operating system and what you can do with it. And the thing with software is it gets obsolete. There are annual operating system updates that not only add new features but also demand greater hardware requirements. We have seen with the iPhone and iPad, how they become sluggish with every new major update and finally become unusable after the second update.

Even if we were to assume that Apple only does incremental software updates on the Watch and it has future proof hardware, the most we can think of the first-generation Watch to be relevant is three years. So what happens to the $10,000 Apple Watch after it is no longer usable in 2018?

The only thing Apple announced last night about the Watch Edition was it would be available in limited numbers at very select retail stores. It is not as if Apple expects it to sell it in very limited numbers, rather it wants it to be that way. It would belong to a very select club of users. In all probability, many who might have the money to buy it won’t be able to get one. They will have to pick up the second-tier, $1,000 Apple Watch and customize it with gold or platinum casing or one studded with diamonds with custom straps.

But the ones who are able to buy it would enter a very exclusive club. Apple could then have a special concierge service for its elite customers – people it wants seen to be wearing an Apple Watch instead of a limited edition Swiss luxury watch. It could offer them trade-ins when the next version comes out, because it wants them to be seen wearing nothing but the latest and greatest Apple has to offer. For Apple, these would become the brand ambassadors for its Watch. The only difference being that these people would be paying to get their Watch.

Of course, these are all possible scenarios that would justify anyone shelling out upwards of $10,000 to get a smartwatch. For them, it won’t just be a smartwatch but an entry into a very select club of one of the biggest brands in the world.

I don’t expect Apple to make much noise about the services it would offer to these customers. Such services are never advertised, it is always an inner circle that’s let in to clubs like these. So while the $10,000 Apple Watch would make no sense to most of us mere mortals, it could be one of Apple’s biggest masterstrokes.

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  • Published Date: March 10, 2015 6:41 PM IST

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