The secret's out - Apple has revealed the pricing structure of the Apple Watch and - surprise, surprise - that premium gold Edition model is causing a bit of a furore.
But while £13,500 (US$17,000, AU$17,000) may seem like a large amount of money to pay for a device that many suspect will become obsolete within five years (unlike, say, a Rolex or a car) the hardest sell for Apple to consumers will actually be the Sport, which comes in at a much more reasonable £299-£339 (US$349-$399, AU$499-$579).
Apple made a big deal of the Sport Watch on stage, highlighting that the low price point is perfect for people on a limited budget who want a watch they can, as the name implies, do sporting activities with. Model Christy Turlington Burns was brought onto the stage to show off her recent marathon run at Mt. Kilimanjaro and how the software on the Watch helped her, measuring heart rate, steps etc.
Unfortunately, the market for low-end versatile smartwatches is saturated already with a huge range of options for those wanting to pay under £300 for a piece of technology on their wrist. Samsung, Pebble, LG, Motorola: all of these companies make a cheap and cheerful wrist wrapper.
Conversely, the 'high-end' smartwatch market is yet to be explored on a large scale, with manufacturers choosing cheap products as the purchasing incentive over differentiation through materials or software. While the software on all Apple Watches is the same, the materials and bands they come with are vastly different.
The Sport model is made of aluminium with a plastic band while the middle model, named Collection, is made from stainless steel and comes with a myriad of straps, from leather to a 'Milanese Loop' made of steel. The Edition model comes in 18-carat gold, resulting in a hefty price tag. In short, anyone looking for a smartwatch made out of high-end materials now has their answer.
An earlier report quoted supply chain sources that stated Apple had ordered about 5 million Watches, half of which will be Sport, a third Collection and the rest Edition. The plan is to start producing one million high-end watches a month soon after.
If true, the fact that Apple is investing so heavily in the ultra-expensive Edition Watch and slightly-less-expensive Collection Watch shows that it believes people are willing to buy a smartwatch as a status symbol, in a similar vein to a Rolex or Patek Philippe.
The Apple Watch becomes available for pre-order on April 10 and it'll be interesting to see how well the device sells. Initially, Apple is going to report Watch sales under the "Other" category in its earnings report, which includes the Apple TV.
That will make it difficult to gauge the success of the wearable early on, but if the Apple Watch is a winner then Apple may move it to its own earnings category. However, it is unlikely a breakdown of the three different models will ever become available.
Many pundits have decried the whole of the Apple Watch line as a "hard sell," assuming that the most expensive model will be the biggest struggle, but I believe the opposite is true. The Edition model has the biggest USP and a customer base that has already decided that they are willing to spend ten thousand or more on a watch. Now it is simply up to Apple to convince them that the Watch Edition is for them.
Apple has been fortunate that in the intervening period between announcing the Watch and releasing it there hasn't been a surge in smartwatch popularity. Anecdotally, many people I've talked to have asked why anyone would even want to wear a watch, let alone an Apple Watch.
Here, the Edition wins. In the New Yorker's lengthy profile of Jony Ive, an executive at a Swiss watchmaker is quoted as saying that a bigger threat to their business would be that expensive jewellery on men became fashionable, usurping the need for an expensive watch. The Edition plays well into this ideology, showing off a user's wealth and catering to the needs of people set on owning a watch. The Sport model does the opposite.
It is too early to say whether the Apple Watch will be a success or failure and it likely won't be fully evident until version three or four of the watch, when the technology has been honed and users have (potentially) taken to the idea of a 'smart' watch which interacts with their phone.
But in the intervening period, the hardest Apple Watch to sell will, ironically, be the cheapest.
