Talk About Sticker Shock: The $17,000 Watch.

It seemed that even the announcement of the Watch couldn’t kill the rumour mill about the Watch as there’s been rampant speculation about just what this device will be, what it will cost and what it will mean for tech consumers worldwide. I guess I shouldn’t be surprised, any potential Apple product receives this treatment, but it still shocks me just how people are in potential rather than actual products. Yesterday Apple announced the price range for their range of Watches and they start at the expected price, some US$349 and rocket up to the absolutely crazy price of US$17,000. Needless to say those premium editions are far more premium than most people were expecting and it makes one question what the motives behind those devices are.

Apple iWatch $17000

For starters smartwatches are still in their nascent stages with numerous companies still vying to find that killer design, app or whatever it is that catapults them to the top of the pile. For me it’s still about aesthetics, something which the Watch certainly doesn’t have, and the only one that’s managed to come close to winning in that regard (in my mind) is the Huawei Watch and I’m even skeptical of that given how the Moto 360 turned out. For others though it’s going to be about the features, something which the current Watch seems to satisfy, however as time goes on those $17,000 Watches are going become decidedly dated and this brings in the quesiton about Apple’s strategy with these premium devices.

There’s no doubt that there’s a healthy dose of margin on the higher end devices, especially considering that the innards on those devices is identical to the ones that cost a fraction of the premium models. So potentially these higher end Watches are being used to subsidise the lower end although honestly I can’t remember a time when Apple has done this with another consumer product, a hefty premium on all hardware (and losses elsewhere) is their modus operandi. Whilst I can see the lower end models fitting well into Apple’s yearly product cycle I can’t say the same for these high end models although I’ll be the first to admit that someone paying that much for an Watch obviously has a different sense of value to me.

The argument has been made that these luxury versions of the Watch won’t be bought for the functionality which I agree with to a point however there are far, far better purchases that can be made to facilitate the same purpose for a similar price. The differentiator between those products and the one Apple is peddling is the functionality and it’s highly unlikely that someone who wants a fashion accessory would pick a $17K Watch over an equivalent Rolex or Patek. In that regard the functionality does matter and these watches are going to be rapidly outpaced by their cheaper brethren just a year down the line. Apple could of course offer an upgrade service although nothing of that nature has been forthcoming and they’re not exactly a company that prides themselves on upgradeable products.

Regardless of what I think though it will be the market that decides how popular these things will be and whether or not Apple can break into the realm of high fashion with their luxury Watches. My personal opinion is they won’t, given the fact that whilst functionality might not be important in a luxury watch it’s Apple’s only differentiator at this point. However I also highly critical of the iPad so I’m not the greatest judge of what should make a product successful so maybe an Watch with a gold case will be enough to sell people on the idea, even if the resulting watch will be replaced by a sleeker brother only 12 months later.

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