There’s no difference between the base-level $350 Apple Watch Sport and the $10,000 18-karat gold Apple Watch Edition in terms of what they can actually do. But there’s certainly a difference in the what they’re made of, and you may have noticed a difference in price.
Just a slight $9,650 difference in price.
It’s reasonable to assume that $10,000 qualifies as “a lot of money” to most people—maybe not for a car or a house, but certainly for a watch that needs charging every night. (There are, of course, exceptions.) But in the world of high-end goods, $10 grand is not at all unreasonable for a 42mm 18-karat gold watch with sapphire crystal glass. Within that context, it’s actually sort of a bargain. However, there’s a clash between what the Apple Watch is and does, and the fundamental reasons why people spend thousands—or tens of thousands—of dollars on a timepiece.
Let’s talk about gold. 24-karat gold is pure gold, and it costs around $1,200 per ounce. It’s also too soft to use for watches and jewelry. 18-karat gold, which is more common but still costly, is usually 75 percent pure gold mixed with other metals. There are reports that Apple’s special blend of 18-karat gold is different, using ceramic instead of other metals to make the watch harder and less scratch-prone, thanks to an innovative, recently patented manufacturing approach. It may contain less gold by volume than normal 18-karat gold, due to the fact that the ceramic has a lower density than metal.
Depending on what the gold is mixed with, 18-karat gold has a different color. Yellow gold is usually 75 percent gold mixed with some combination of silver, copper, and zinc. Rose gold is usually 75 percent gold mixed with a greater amount of copper and a smaller amount of silver. With the Apple Watch, the rose and yellow coloration likely comes from ceramic rather than alloys. In any event, while the Apple Watch comes in yellow- and rose-gold varieties, both should contain the same amount of gold.
Also important to note: These are true-blue gold watches, not gold-plated watches. A gold-plated watch just has a spray tan; the plated stuff will chip away and may turn your wrist green. Solid gold doesn’t do that. Not all of the Apple Watch Edition’s components are made of gold, of course, but everything that looks gold is the real deal.
Compared to similarly sized (38mm and 42mm diameter) high-end watches made with 18-karat gold, the sky-high price of the Apple Watch Edition is right in line. But while the Apple Watch certainly does more than your average high-end Swiss watch, it’s also a different animal. Those other watches are hand-crafted timepieces from specialists in Switzerland that know a thing or two about tourbillons and rattrapantes. They have hand-crafted complications that jack up the price.
The difference between an 18-karat gold watch that costs a few thousand dollars and one that costs tens of thousands of dollars comes down to the movements inside them: The really expensive ones have handmade movements, while “cheaper” ones have those parts outsourced. So when you pay $20,000 for a watch, much of that is for rarity and skilled labor, not just the materials.
Here’s how the Apple Watch pricing compares to some of those other luxury wristwatches, as well as an 18-karat Tissot watch with an outsourced ETA movement and a gold-plated cheapie.
Within this context of this list, the Apple Watch Edition has a fair price, but it’s still a black sheep. It has big things going for it: It’ll be more versatile than the Piagets and the Vacheron Constantins of the world, thanks to an app ecosystem, a proximity-based payment system, and fitness-tracking features. There’s also the small fact that it’s built to interact with an iPhone, which happens to be the best-selling smartphone in the world.
So in the dream scenario for Apple, the Watch will be the iPhone of its category: A device that transforms the industry it enters, becoming the blueprint for How To Do It. But even in the best-case scenario, don’t expect an iPhone-like cash cow. People buy new iPhones every couple of years, in sync with their carrier contracts. The Apple Watch may be more like an iPad in terms of sales cycles, and it’s less of a necessity than a smartphone. If people buy one, especially the $10,000-and-up Edition, they’ll want to use it for more than a couple years.
And of course, it’s a digital watch. That may be enough to keep serious watch collectors away, despite its extra functionality. It’s an interesting juxtaposition within the watch world: Apple is creating a high-end, mass-market wrist-computer for an audience that values tradition, mechanics, and individuality.
Perhaps most daunting for those considering spending thousands on an 18k Apple Watch? It will certainly be an investment, but not in the same way an artisanal 18-karat gold Swiss watch might be. Technology is ever-evolving and fickle, and the Apple Watch may quickly become obsolete. It needs to be charged every day, and in a few years its battery will stop working altogether. This is not an heirloom.
There’s still a market in the watch-collector crowd—it just means that collectors will buy it for reasons other than being a watch. And they very well might, because they’ll experience less sticker shock than your average person. Imagine this scenario. You have a ton of money, you like high-end watches, and you own an iPhone. The Apple Watch seems interesting to you, either as a collector piece or a new way to interact with your iPhone. So which one do you get? You certainly wouldn’t befoul your wrist with one of the lower-end models. You have the cash, you go for gold.
It’s important also not to forget that Apple has made a big marketing push in China, which is the world’s biggest smartphone market, the world’s second-largest collection of millionaires, a world power that’s expected to double its number of super-wealthy households by 2018, and has an appreciation for gold as status symbol.
Apple is focusing marketing efforts in China, and it’s already experiencing sales momentum there with its other products. The iPhone is gaining serious ground on Xiaomi, China’s market-leading smartphone manufacturer, especially in urban areas. At today’s Apple event, the show started with a montage of shoppers in China’s newest Apple Store. And after it was announced, one of the Apple Watch’s first public appearances was on the cover of Vogue China last November. Of course, the one on the cover was that pricey rose-gold version.
As for the anodized aluminum Apple Watch Sport and stainless-steel Apple Watch? Those are meant to steamroll the Moto 360s, Samsung Gears, and LG G Watches of the world. The Apple Watch Edition may be essentially the same thing, but it’s hoping to conquer an entirely different market.