Apple Watch Pricing

Since Apple announced the Apple Watch yesterday, one of the main points of contention among friends and colleagues seems to be whether or not the base price, $350, is too expensive for it be a massive success.

First off, I think there is some good wisdom in the argument that as a 1.0 debut for a product line that Apple no doubt currently expects to spend years if not decades refining, it doesn’t matter all that much if it’s “too expensive” for the mass market.

One challenge in determining what the watch should cost is determining what other products it should be compared against. Apple presents it as a “smart watch”, a “fitness watch” and as a “fashion watch,” but I’m sure that aficionados of each category will find plenty of faults.

It’s not exactly a “fitness watch” because even the special sport model doesn’t appear to be as rugged or water resistant as watches designed specifically for that market. It also doesn’t possess its own GPS, so unless you’re planning to carry your iPhone with you on every adventure, it’s a poor competitor to dedicated navigation watches from e.g. Garmin. On the other hand, its passive activity collection features such as monitoring vigorous activity, heart rate, etc., set it apart from relatively simpler sport watches such as this Casio which itself breaks the $200 mark. It might not be such a stretch that a significant subset of the sports/fitness market will pay the extra $150 for the purported advantages of Apple’s UX design, activity monitoring, and integration with other Apple products.

The elusive “smart watch” category is so new it’s hard yet to even know what a smart watch should or shouldn’t do. When Google announced its Android Wear platform earlier this year, the watches it presented included fancy features like turn-by-turn mapping navigation, voice recognition, and integration with Android devices and the apps on those devices. Apple seems to be aiming for the same targets, but also adding novel additions such as the “digital crown” as a usability enhancement, and touchy-feely stuff like the ability to send Taptic pulses to your friends and loved ones.

As far as fashion is concerned, it appears that this is the niche in which Apple probably sets itself farthest away other sports or smart watches. Frankly, the Apple Watch looks pretty good to me. And it’s meaningful that Apple will offer a wide variety of bands and designs, such that it will be difficult to write off the whole line as “ugly” without thoroughly evaluating the options. But as attractive as it is, it’s bulkier than most watches worn purely in an effort to appear sleek or stylish. This is probably something that will change over time. I agree with Manton Reece, who quipped on our latest Core Intuition episode that he had no doubt in a year or two’s time we will be looking back at this debut line of Apple Watches as the relatively clumsy 1.0 releases that they are.

But here’s the thing about fashion watches: they get really expensive, really fast. I don’t think anybody who would consider Apple’s watch purely for its fashion appeal would blink twice about the price tag at $350. So to the extent that Apple can itself influence what is or isn’t “in style” for a certain subset of fashionistas, it seems realistic to expect that Apple will sell an awful lot of these to folks who don’t particularly care about the finer points of their functionality as a sports or smarts enhancement device.

I was intrigued to read this review by Benjamin Clymer (via Ryan Nielsen), who evaluated the Apple Watch from the point of view of a self-identified “watch guy.” He gushes about many aspects of the watch’s design, and perhaps more importantly, appreciates Apple’s apparent attitude in approaching that design. He senses that Apple has respect for the art of watchmaking, and I guess by extension, respect for watch lovers as well. Early in his review he jumps to what I think makes a great summary of his findings when he appreciates the “feel” of the Apple Watch:

The overall level of design in the Apple Watch simply blows away anything – digital or analog – in the watch space at $350.

If Benjamin’s impressions are at all shared by other watch-lovers who get their hands on Apple’s watches, it seems likely to me that it will be an outright success as a fashion watch. Bear in mind that people who wear a watch for this reason do not typically limit themselves to one watch. I’m not even a watch-lover, per se, but I own two watches that are nice enough to wear when dressing up a bit, each more suited to a different style of apparel.

I suspect that at least for the 1.0 release of Apple’s watch, few people will buy it as an outright sports or fitness solution, but many will appreciate those features after buying the watch primarily for its “smart watch” or fashion appeal. As a satellite device to an iPhone, $350 seems in the realm of palatability for most people who value the thrill of owning and using cutting-edge technology. And for anybody who senses the watches will fill a fashion void on their watch rack, $350 will seem like a steal.

For everybody else, who will continue to feel that $350 is an absurd price to pay for something with such little proven utility, and with so many compromises compared to other solutions? I’m sure the $99 Apple Watch is only a couple years away.