How Much Should Apple Watch Cost? Even Apple Might Not Be Sure
For the past six months we’ve been speculating and arguing about what Apple Watch will cost, studying gold prices and Rolex catalogues as we try to get some kind of a handle on how much we need to save if we want a Link Bracelet or a Milanese Loop. All we know for sure is that it starts at $349—a fact you wouldn’t know by looking at the Apple Watch website. Had Cook not revealed the starting price at the end of Apple’s iPhone 6 event, we would be completely in the dark; over the pages and pages of gorgeous images and enticing text there isn’t a single mention of a dollar amount.
That’s because I don’t think Apple knew where to price the thing themselves.
During the Apple Watch reveal last September, the company was extremely deliberate in not specifying which tier carried that $349 “starting” price, and while most of us assumed (and still do) that Apple was referring to the “cheapest” Sport model, there are some reporters and analysts who believe otherwise. Their argument relies on the technicality that said price was attributed to “Apple Watch” and not “Apple Watch Sport” (and certainly not “Apple Watch Edition”). If true, this means that the stainless steel version will be dramatically cheaper than all those $1000 estimates have led everyone to believe. Sure, there are good competitive reasons not to be loose-lipped with issues of MSRP when announcing a product that’s a half-year from retail, and maybe “price” is as good for the hype machine as anything else. But the vagueness in attribution is curious because it was calculated. And ironically, I think it was calculated to buy Apple more time.
Apple doesn’t sell at a loss, and they probably never will. That said, it’s very unlikely that it costs Apple $349 to manufacture the stainless steel Apple Watch, so they could certainly sell it for thereabouts without taking a hit to the bottom line. But the margin would be uncharacteristically slim for Apple, and I’m not sure they’re more interested in selling buy-in and ecosystem over moving hardware. Apple is a hardware company first and foremost. Still, Apple Watch isn’t familiar territory for anybody, and the last several months may have proved instrumental in reinforcing — or blowing up — Apple’s notions of where exactly the wearable needs to be priced to spur along the most efficient adoption. If Cupertino’s been paying attention, polls like this one might be a harbinger of the prices set for Monday’s main event. Because Apple Watch is a new concept in a category with no real market presence and a ton of skeptical baggage attached, maybe Apple will get aggressive with pricing for the first time in recent company history.
If they do, the announcement would change the narrative completely, and it would be something of a Marketing 101 masterstroke for Apple. But it would be particularly big for Tim Cook because, for all his supply chain acumen, he’s just not the expert salesman his former boss was. Every time Cook takes the stage, people wish they were watching Steve Jobs instead. And while he’ll never shake that association, he can add to his own legend by picking the right price for Apple Watch.
Remember, Apple Watch isn’t just the first new product class out of Cupertino that Jobs didn’t create, it’s also the first major new device from Apple that Jobs hasn’t been around to price and sell. And that was arguably the man’s single greatest talent as an industrial visionary. His prices were always attainable, but not necessarily quite comfortably so, and this gave his wares the premium cachet Apple enjoys to this day.
Apple Watch is the first Apple product that is truly non-Jobs.
Whether it ends up being notable or notorious for that fact remains to be seen.