Why it’s wrong to consider the $17,000 Apple Watch a tech product
Now it was the middle of a weekday and although there was no sign of “sale” in sight, the store was packed. All around me, people seemed to be picking up bags by the dozens. Unfamiliar with the world of high fashion until then, it was my first visit to a Coach outlet and I still remember my reaction when I saw the price tag on one of the bags: “And we thought Apple had crazy margins!”
With Apple introducing the $10,000 Apple Watch Edition on Monday – some strap and case combinations will cost up to $17,000 (around Rs 10.5 lakhs) – I couldn’t help but reminisce about this that day. Most of the bags on display cost over a thousand dollars – bags where the cost of raw materials and labor would be single digits at best.
But of course, nobody talks about the cost of raw materials when it comes to high fashion – and for good reason. An Armani suit may be made by the finest craftsmen using the finest fabrics, but the difference in the cost of raw materials compared to that of an average Joe suit is not commensurate with the difference in their respective retail prices. But have you ever heard someone complain that Armani suits are too expensive? There are people who buy these costumes, and there are others who realize it’s not quite their territory and move on.
Although Apple is as close to high fashion as it is to technology, its products are subject to extensive analysis in terms of cost. Every iPhone launch is followed by outrage when iFixit releases the cost of individual components, and they are invariably found to cost less than a third of the selling price of an unlocked unit. R&D costs, salaries, marketing, and other ancillary expenses aren’t factored in, but it’s still a legitimate exercise in theory, since the iPhone and other Apple products have until now been technology products.
The Apple Watch Edition is unfortunately seen through the same lens. “A $17,000 watch that will surely be outdated in less than two years? Who’s gonna buy this stuff? I know our regular readers won’t. But I also know who will — the people I’ve seen in the Coach showroom picking up bags by the dozen.
Fashion may be a market in which products become obsolete faster than technology, but fashion brands never seem to have a problem finding takers for new product lines every few months. While the tech industry is used to a two-year upgrade cycle, fashion has summer, fall, winter, and spring collections all in the same year — but no one bats an eyelid.
Some might be tempted to compare the Apple Watch with other luxury watches, but there’s a reason why pairing it with fashion accessories makes more sense. Although the Apple Watch Edition is comparable in price to other 18k gold watches, it is unlikely to become a family heirloom like other handcrafted watches that often increase in value over the years. Apple wants you to buy the watch because it looks good now – like a bag, bracelet or other piece of jewelry – not because it’s something you’ll ever want to pass down to your kids.
Yes, the watch will be obsolete in terms of technical specifications in two years, and it would be a concern for Apple if it positioned it as a technological product. But Apple has rarely, if ever, marketed its products based on specs, and with the Watch, it goes to great lengths to ensure that it isn’t even considered a tech product. The $10,000 (roughly Rs. 6.2 lakhs) Apple Watch Edition is unlike any product that Apple or any other tech company has ever shipped.
The tons of docs on Apple’s website and everything Tim Cook and other company executives have said about the watch in their public appearances only described it as “our most popular device ever.” personal”. Not once did Apple use the word “smartwatch” to describe the watch.
It is not a coincidence. Once you describe a device as ‘smart’, you’re calling it a tech product, invariably embroiled in spec wars, which Apple is particularly keen to avoid. And if your device was never meant to be smart, can it really become obsolete in two years? Apple would love nothing more for you to buy a new Apple Watch Edition every year, but if you continue to keep one, it will continue to be as “personal” as it was on day one.
Luxury products are undoubtedly of very high quality, but for most people, the priority is to be seen with a particular label. These people are not worried that the current design will become obsolete in a few months; if anything, they can’t wait for an excuse to spend even more money on the shiniest new thing when it comes out. So don’t be surprised if people lining up to buy the Apple Watch Edition today say hello to a new one every two years, or even more frequently.
In no way does this mean that this is how things will actually turn out. The Apple Watch Edition is new territory for the company, as evidenced by the fact that the watch will only be sold in “select retail stores” where it will compete for space with other luxury brands. Apple has always been an ambitious brand when it comes to tech products, but whether the company has built enough cachet over the years to compete with luxury brands when it comes to non-tech products is another discussion altogether.
Before we wrap up, another little anecdote to hopefully explain how the Apple Watch edition is different. Another tech journalist last week mentioned that he liked visiting Emporio in Delhi because he knew he could spend as much time there as he wanted without spending any money. Emporio, of course, is a mall in Delhi’s Vasant Kunj all about luxury brands. If or when the Apple Watch Edition arrives in India, it will find space at Emporio while the Apple Watch Sport and Apple Watch go wild at nearby ‘regular’ Ambience and Promenade malls – alongside others “smartwatches”.
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