Sunday, March 1, 2015

On Gruber's Pricing Predictions of the Apple Watch

John Gruber, writer, blog publisher, UI designer, recently posted on his blog site, Daring Fireball, a blog post titled "On the Pricing of Apple Watch". In the post, Gruber makes his new updated predictions of the Apple Watch pricing, based on his opinions and his friend Vincent, who is "...a watch guy...".

In this post, I am going to take a look at some of Gruber's comments and add my opinion in, which, doesn't mean that much, I am not an expert of the watch industry by any means. And then I'll add my own price predictions.

Gruber mentions that he first thought the Apple Watch Edition would cost around $5,000. Now he says that he thinks that price is too low and the Edition will likely be more around the $10,000 price mark and if you factor in certain watch bands, that price could go up to $20,000! When it comes to the Edition, it's anyones guess! If it is solid gold, I agree that prices could well be into $10,000 - $20,000 range. The Apple Watch Edition is not for the average person.

Gruber then says that the Apple Watch is all about the bands. Those quick to change, fancy bands is one of the key things Apple emphasized on during the September event. Also, remember Apple likely sees the Apple Watch just as much a fashion piece - as a piece of technology. It's likely the Apple Watch will be available to purchase with different bands right away, and not just separately - so this will definitely affect the prices.

Has Apple already listed the Apple Watch models in the collections according to price? Gruber mentions that he noticed the Sport Bands on the left, which have got to be the least expensive and the Link Bracelets on the far right - the most expensive? He believes Apple placed the bands in order from least expensive to most expensive. While this does seem to be the case - there is one flaw with this theory -- the Milanese Loop, the mesh metal magnetic band - can not be cheaper that the Modern Buckle and Leather Loop, right? I don't think so.

The Space-Black Apple Watch is only ever pictured with the Space-Black Link Band on the Apple website. I also believe that this watch will only be sold this way, and it will have a higher price than the silver chrome Apple Watch.

Gruber also thinks that there could be a premium for color straps and even the Space-Gray Apple Watch Sport, citing that in the past Apple charged $150 more for the black (over the white) plastic MacBooks from 2006. I don't think this theory has any chance of being true. While Apple may of had a tax for color in the past, Apple does not seem to have that today. Look at the iPhone's and iPad's. The Space-Gray iPhone is not more expensive than the White. The Champagne/Gold iPhone is the same price too! If any was going to be more expensive, it would of been that one. I don't see any reason why different colored bands or Sport Watches would have a different price.

Gruber also says that he doesn't "...think any of the nicer bands will be available for retail purchase." Like the stainless steel bands. As they "...aren’t accessories that Apple hopes you’ll tack onto your purchase; they’re signifiers of how much you paid for your stainless steel or gold Apple Watch." An interesting thought, these would likely be the most expensive bands. But, I doubt Apple would restrict the sale of these bands to just initial purchase, when they could possibly sell more later on. A customer might buy the Apple Watch with the Sport band to start out, and then want to upgrade later to a more expensive band, like the Leather Loop or the Milanese Loop. If any bands aren't sold - maybe it'll be just the Link Band. But if Apple are selling all the others, then why not have the Link Band be an additional option as well?    

Lets get to my price predictions prices. The 38mm Apple Watch Sport is likely to be the cheapest model at USD$349. This model will come with a Sport Band, and remember - if you buy a Apple Watch Sport, you are not going to have many band options. Will there be a price increase for those extra few millimeters - going from the 38mm to 42mm? I say, yes - definitely! How much? I think the difference won't be that huge, maybe around $50-$100(max). My prediction is the Sport model will sell for 38mm $349 and 42mm $399.

Onto the Stainless Steel Apple Watch. Gruber says that he thinks the range will begin at $700 for the entry model with a Sport Band and will be "...well over $1,000 for the Link Bracelet". Geez, I hope not. If Apple wants to sell additional bands to the average customer, then they should make the stainless steel watch enticing enough for people to choose it over the Sport. If there is around a $400 price increase over the entry model, I don't see many people making that leap. If it was only another $200 difference for all the extra benefits of the sapphire screen and stainless steel body, then maybe they'd be more likely to buy that model. Now I do believe the more expensive bands will be - expensive - You might see (in my opinion) the Space-Black Apple Watch with the Link Band be as high as near $1,000. While it may be wishful thinking, I am still thinking the entry Apple Watch (with Black or White Sport Band) will be: $549 for the 38mm and $599 for the 42mm. However, I would not be surprised if the entry 38mm starts from $649.

As for the Apple Watch band prices (for the Apple Watch Sport and Apple Watch), I think the prices will be between $29-39 for the Sport Bands and at highest $399 for the Link Bracelet.

As for the Apple Watch Edition price, as said earlier, it's anyones guess. I do expect the range for the gold watches to be well over $5,000. And likely at least (if not, way more) around $10,000.

I do recommend everyone who just sat through reading this - to go and read John Gruber's post, "On the Pricing of Apple Watch". It is an interesting read.

Apple is holding a Media Event on March 9th at 10am PDT, where more details of the Apple Watch are likely to be announced. You will be able to watch the event live on the Apple Website. Or, check back here or on Apple's website after the event for the details.

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