Does the Price of Apple Watch Need to Drop in Order for it to See Growth?

With the Apple Watch now being out for over four months, I’ve been thinking a lot about what’s driven adoption of some of Apple’s most popular products, specifically the iPod, the iPhone, the iPad, and the MacBook Air. As I’ve mentioned before, in almost every case, it took several years before these products became truly ubiquitous. Part of the reason is because new technologies require time to grow up as society learns to adopt and adapt to them. But I also think there’s another reason — a reason that makes us much more willing to try these new things out: price.

In 2001, the iPod debuted with a price tag of around $399 and required a Mac. To many of us, $399 was a heck of a lot of money, but having 1000 songs in our pocket was enough to justify the purchase. Still, that wasn’t enough for most people. I took a few things to get the iPod going. Three if I remember correctly. First was iTunes, arguably the most important piece. Second was iTunes on Windows. And third was the iPod mini.

The mini made the iPod far more accessible to people because of both its size and, yes, its price. At a starting price of $249 (for 4GB!), that was almost 40% less than the price of the original iPod. I remember walking into the Apple Store when the mini was just hitting shelves. People were going nuts for it.

Fast forward to 2007 when the iPhone was introduced: You had the choice of a 4GB model for $499 or an 8GB model for $599. I remember being in line for one of these things, and while it did sell well, it still didn’t take off like wildfire. Again, like any revolutionary product, time and new technologies are an important factor, but so is price. In fact, within 60 days, Apple got rid of the 4GB option altogether and lowered the price of the 8GB model to $399. That certainly had an effect on adoption, but it still wasn’t enough. A year later when the iPhone 3G came out, Apple adopted the subsidy model which allowed anyone in the U.S. to grab one for a starting price of just $199. That, combined with the introduction of the App Store, was the beginning of what would become one of the biggest phenomena in modern history: the smartphone.

The MacBook Air saw something similar. When Steve Jobs unveiled the ultra-portable laptop, it cost $1800 and was slow as hell. It took a combination of technology and a more affordable price to make people look at it as the defacto laptop. Again, technology played an important role. But make no mistake, so did price.

Which brings me to the iPad. The iPad didn’t take much time at all to get adopted, and I think I know why. As I pointed out before, we all understood it. It was essentially a bigger iPhone (or iPod touch). Everything was essentially the same. But the other major factor, I think, was price. When Jobs stood on stage and dropped the $499 price tag, we were all shocked. How could this thing be so affordable? Jobs himself said that they had technological goals and price goals. At $499, Apple set up the iPad to be a success right from the start. And it was.

So, what about the Apple Watch? Does the Apple Watch need to drop in price if Apple wants to see any major adoption? If you look at history, you could argue that it does. Every one of Apple’s most popular products in the last 15 years has basically either seen a price drop or has adopted a model that makes it easier for people to purchase. $349 isn’t crazy expensive, but it might be a bit much for something we all have collectively decided is not yet remotely needed. One way Apple could get people more interested this early is by lowering the price.

Of course, I could be completely wrong and the Apple Watch may be just fine where it is. But something tells me that if the price comes down just a little, we may see some interesting results. And by the time Apple decides early sales have covered the R&D and factory tooling costs, I wouldn’t be surprised to see a $250 starting price for Sport and a $450 base for the standard stainless model. Edition, of course, won’t see a price drop for obvious reasons, but you’re not buying one of those anyways.

Image Credit: Answer Wen