Image credit: Apple
Apple Watch Pricing
There are two distinct concepts when it comes to the Apple Watch. First, is it priced right? In my discussions with some of the TMO staff who are watch aficionados, I must repeat what I've written before. “Apple Watch Pricing is Very, Very Reasonable.” The fact that one can buy a $25 Timex watch is not an argument that the Apple Watch is overpriced. We know better than that.
I've also done a little research. Last weekend, I visited my local Nordstroms and headed straight to the watch department. There, I saw some Victorinox and Burberry watches that were in the US$500 to $1,000 range. I asked the salesman if they sell well, and he replied that they do.
People with an affection for watches buy them, appreciate them, and keep them for a long time. Apple would be foolish to buck that tradition in the extreme, even as they know the technology must advance. To understand that fine line is to have insight into Apple's approach.
My decades old Rado watch, stainless steel and sapphire, still looks great.
The issue with price for traditional watches, however, is that they are finely crafted on the inside. A $600 Victorinox (Swiss Army) watch with an expensive movement can be expected to last for decades (with perhaps occasional maintenance). An Apple Watch, however, is cut from the cloth of modern digital electronics: the technology changes quickly and there is no sense of eternal value. This worries many potential Apple Watch customers. But I'll get to the idea of value in a moment.
On the other hand, the capability of an Apple Watch is orders of magnitude greater than a finely crafted mechanical watch, even if the old style watch does sync to WWV time signals. Perhaps the new meme is that the the intense usability and advanced features of the Apple Watch are highly compressed in time. (Everything else is.) If you see it that way, the price of an Apple stainless steel and sapphire watch for $549 is a fair one on balance.
Next page: the concept of value.
Will the Apple Watch be Valuable?
A completely different factor is that of value. Is one satisfied that Apple is selling a product whose value is laudable? In other words, does an Apple Watch, deserve its price point? Will it retain is value? Will the customer perceive that the investment is a wise one? Or is Apple just copying the price of other watches so that the glamour rubs off on Apple?
For example, many years ago, I was a Subaru customer, and I was sent literature about a new Subaru sports car, the SVX. The comparison chart compared its features to a Porsche model, I forget which. In any case, my overwhelming feeling was that pricing this SVX the same as a Porsche and comparing it to a Porsche didn't make it a Porsche equivalent. Subaru overreached, and I wasn't impressed.
Apple is very good at marketing a new product in such a way that we think we see the benefits, suspect what the future potential might be, and trust that there will be no buyer's remorse. Apple takes pains to make sure we always have pride of ownership. However, if you believe that Apple has erred and overreached, then your perception of value will be a poor one.
In this vein, there are people who might admit that the Apple Watch and Apple Watch Sport have value, but the Apple Watch Edition, without (apparently) $10,000 worth of gold cannot hold its value in the long term. In that case, naysayers are also missing the point. See, for example, “Why is Apple making a gold watch?” Customers who have enough money to buy a Lamborghini Aventador for $400,000 will also perceive the value of a gold Apple Watch in different ways than The Rest of Us who can barely afford a car of one tenth that price. Value can be a subjective thing and twisted to achieve a rhetorical end.
Back to the middle of the road Apple Watch. The battery in the Apple Watch has been reported to be designed for a three year life. And that battery is replaceable. “Apple Watch Battery is Replaceable, but You Can’t do it.“
Nominally then, with a single new battery, one might reasonably expect to use the same Apple Watch for six years, but perhaps without the latest features of 2021. Why would Apple engineer a battery like that for a watch that they want to make unusable in a year and force the customer to buy a new one? My feeling is that customers who think the Apple Watch won't have lasting (5-6 years) value are those who are convinced that Apple is out to swindle them and make them unhappy. That's never been Apple's way.
That doesn't mean that Apple won't come out with new watch models. There will be some customers who must have the latest model and have the necessary disposable income. And there will be customers who will continue to be happy with their original purchase for a time longer. After all, it's the same way with cars. One can still be very happy with a BMW 3-series bought in 2010, appreciating its value, even though it doesn't have a rearview camera, Bluetooth and collision sensors. And one can be properly skeptical of those who need a new one each year.
Watchwords
Not only are the Apple Watches rightly priced for the intended customers, but I expect the perception of value will come into equilibrium once millions of customers start to use the Apple Watch daily. In this regard, I don't see the value proposition any different than the original Bondi blue iMac from 1998. Customers flocked to it because it looked great, felt great to the touch, and was easy to connect to the Internet. Customers stood in line for it.
All those iMacs, except for some museum pieces, are now in the trash land fills, but while they were being used, they worked great and brought a smile to our face. An equivalent PC at the time was simply no match in terms of desirability or ease of use. Or value. The important point is that those iMac owners moved on when it was time, some earlier and some later than others.
Apple isn't really doing anything different today than it always has. And yet, it's incredibly easy to find articles nowadays with dire warnings that this new Apple product will betray you, make you unhappy, and waste your money.
Those articles catch attention because the titles are designed to exploit our worst fears. Long-time Apple customers should know better.