Tag Archives: Luxury

Some thoughts on the target market for the Apple Watch Edition

Thoughts on the Apple Watch have been simmering on my mental back burner since it was announced in September, and I followed along with the announcement yesterday to see what new things we might learn about the product — most significantly, the prices for the higher-end models. All we knew up to this point was that they “start” at $349, and that’s for the lowest-end, anodized aluminum Apple Watch “Sport”, with a “fluoroelastomer” (a.k.a. rubber) band. (Side note: It seems Apple is taking great pains not to call the band “rubber” in their marketing, yet I noticed Christy Turlington Burns, in her appearance on stage yesterday, referred to it — quite dismissively, no less — as “rubber”, and I think I saw Tim Cook flinch just a bit.)

The stainless steel “regular” Apple Watch and the gold Apple Watch “Edition”, with fancier bands, would clearly cost more… much more. I was frankly surprised the starting price for the steel Apple Watch is only $200 more than the Sport, and I was not at all surprised that the Edition starts at $10,000. But the fact that it does start at $10,000 got me thinking more about why. I have some ideas, which I will explore here, but first some more general thoughts on the Apple Watch.

Not my taste

First off, I personally am not really in the market for an Apple Watch at all. I find it interesting, but a) I don’t really want to wear something on my wrist, and b) I’m not interested in this until the second or third iteration. But if I were to buy an Apple Watch, there is absolutely no question that I would get the Sport. I wouldn’t even consider either other option, and price is only a small factor in that. I just don’t like shiny objects. Perhaps it’s my stubborn proletarianism lashing out, but I find wearing shiny items like a highly polished watch (in either stainless steel or gold) to be an ostentatious display of… something. Not my personality.

I especially dislike gold. I can tolerate the mild “champagne” gold color Apple has introduced on the iPhone, iPad and now MacBook, though I don’t personally want them. But pure, shiny gold is something I associate closely with Donald Trump’s raging ego. (Sorry… very specific and most probably unfair, but it is what it is. Again, just my personal taste.)

Clearly I am not the kind of person who desires high-end luxury goods. I appreciate high quality. That’s why I like Apple’s products in the first place. But there is definitely a level of luxury to which I cannot, and emphatically do not, aspire. So be it. Despite my own tastes, I do think I have some idea why Apple has created the Edition version of its watch, to whom it’s targeted, and why it costs so much.

So whose taste is it?

Most people who can’t afford it think $10,000 is an insane price to pay for a watch, and they especially cannot comprehend how someone would want to spend that much on a high-tech watch that will become obsolete in a few years. I’ve read many comparisons with Rolex and other high-end mechanical watches that are priced in that range, which are typically bought to last a lifetime, if not to become a family heirloom passed down through the generations.

This cannot be exactly the audience Apple is targeting, either. Because there’s a range of wealth where someone can afford a $10,000 watch, but it’s still a substantial investment for them — the kind of thing you buy once, ever. And then there’s the range of wealth where someone can easily drop $10,000 on a whim and not think twice about having to do so again in a few years.

This is the target market for the Apple Watch Edition. It’s extremely small. But it exists.

So the question then becomes, why is Apple targeting this market at all?

Watches are different from phones and other gadgets in a significant way that Tim Cook touched on yesterday. But he didn’t fully probe that difference and why it might make sense for Apple to create a “disposable” product with a 5-figure price tag. Watches are something you wear, a fashion accessory in a way that other objects that you merely hold or carry in your pocket are not. They are an extension of who you are, at least for some people, and quite likely for this exact small niche market I’m talking about.

In short, I believe the subset of people for whom the Apple Watch Edition is made are, in general, willing to carry the same smartphone as “the masses”… but they are not willing to wear a similarly proletarian watch.

These people are important customers to Apple. Not just because they spend a lot of money on Apple’s products, but also because they tend to be high profile people whom Apple wants the public to see carrying, using, and now wearing Apple’s products. And the only way to get them to wear an Apple Watch is to make one that is as pretentious “discriminating” as their other tastes.

But why so exclusive?

Now there is one point Tim Cook mentioned that I interpreted in a different way from other analyses I’ve seen of yesterday’s announcement. Tim Cook said something to the effect that Apple Watch Edition will be available only in extremely limited supplies, and only in “select retail stores”. Most of what I’ve read suggests this means that only some of the Apple Stores will be carrying Apple Watch Edition. Personally, I don’t think any Apple Stores will be carrying it. I think it will only be sold in exclusive luxury jewelry and watch stores. Rodeo Drive kind of places. (I guess… what the hell do I know? I’m sure there’s some ultra-luxury shopping venue I’ve never even heard of, and the people who shop there look down their noses at lowly Rodeo Drive.)

The point is, I think Apple is going out of their way to make Apple Watch Edition so absurdly ultra-exclusive because there’s a very small, very wealthy, and very important niche market for a product this extreme, but for whom it needs to be this extreme, solely as a differentiator. For everybody else who might even consider such a product — everybody — they will be satisfied by either the Apple Watch Sport or the Apple Watch.

The only difference between the regular Apple Watch and the Edition is the metal and the strap. The electronics are identical. The amount of extra R&D Apple had to put into creating the Edition can probably pay for itself, even if the Edition sells just a few hundred units. So, from that perspective, why not create it? But if you do, the only way to make it worthwhile is to go all out, if not completely overboard, with the exclusivity and perceived “luxury” of the object.

I think that’s exactly what Apple has done.

Dispatch from the Daily Commute

A few days ago I was reading the introductory chapters of a book on the core philosophy of Buddhism (if you care, it’s called Buddhism: Plain and Simple by Steve Hagen). I was intrigued by the importance Buddhism places on living in the present moment, being fully aware of your situation at all times as it is, rather than as you want it to be, as the key to “awakening.”

This morning, as I crawled along I-285 on the morning commute, I figured it was as good a time as any to try “awakening” myself.

I have had a few, rare moments of true enlightenment in my life. It hits you like a lightning bolt, and for a brief moment you see things in a new way, feel a greater perception than that of yourself and your finite existence. This morning definitely did not feel like one of those times. But I made some interesting observations nonetheless.

My first observation was a pair of bumper stickers on a Toyota Corolla. Thanks to the Superman vision I get from my new glasses, I was able to make both of them out. One said, “My kid and my money go to Duke.” The other, “I live in this car so my kid can go to school.” Great message. It’s nice that you care enough about your kid to support them in their pursuit of advanced education at a prestigious school like Duke, but I do detect a hint of resentment there, eh?

Next up, the car dancer. You know how it works: You spot a car ahead of you that seems… well… not to be pursuing the enlightenment that comes from a full awareness of the present moment. The car lags behind the flow and then surges ahead, weaves side-to-side, and shakes strangely. As you get closer, you learn why: The driver of the car is reliving the excitement of a weekend spent “clubbing,” with music blasting, head shaking, hands everywhere but where they should be… on the wheel. As long as this person manages to keep a few neurons focused on the road ahead, everyone is safe and witnessing the ecstasy can be amusing rather than life-threatening. Fortunately, today that was the case.

At this point, the traffic started to snarl, and I found myself spending the majority of the remaining, excruciating crawl to the office staring at the back of a Lincoln Blackwood. Now this is something someone has to explain to me. I hate to sound like a stale Jerry Seinfeld stand-up bit, but what’s the deal with these new luxury SUV-truck hybrids?

Luxury SUVs are a strange enough concept as it is. I don’t expect to see too many Lincoln Navigators really navigating anything other than Peachtree Street. At least back in Minnesota it makes sense to have 4-wheel drive in an urban environment. In Atlanta, where we get one feeble snowstorm a decade, seriously, what is the point?

Concurrent with the development of the luxury SUV came the SUV-truck hybrid. You know, the Ford Explorer Sport Trac (where’s the “k”?), the Chevy Avalanche, etc. It’s the El Camino of the 21st century. But then, the worst… the luxury SUV-truck hybrid. It started with the Cadillac Escalade EXT. Basically, take a Chevy Avalanche, lose the cheap, charcoal-gray molded polycarbonate trim, add some of the characteristic chiseled edges that are the hallmark of Cadillac’s “innovative” new designs, throw on some faux gold trim, and you have it!

The Lincoln Blackwood is an even greater mystery. It looks more like a truck than the Escalade EXT, but that begs the question, why on Earth would you want a luxury pickup truck? Isn’t that a complete contradiction? Pickup trucks are inherently utilitarian vehicles, but how much utility can you really get out of them if you’re afraid of dings or paint chipping? I stared at the back of that Blackwood for several minutes, pondering this question and wondering how it could lead to enlightenment.

And then, it hit me. As we rounded the curve approaching “Spaghetti Junction,” direct sunlight struck the back of the truck for the first time, and I finally noticed that the sides of the truck really are black wood, or at least an elaborate woodgrain veneer.

At this sight, I understood the full nature of the situation, and at last achieved some small semblance of enlightenment.

I was expecting there to be a logical reason for the things I was observing. That was my folly! Thousands of people cramming onto the arteries of a city at once, morning and night, racing to-and-fro, accumulating “stuff,” basing their value as human beings on their ability to spend money on useless “utility” vehicles, working a job they loathe all week just for the next opportunity to hit the nightclubs on Saturday night (sounds a bit like Tony Manero), or sending their kids to an expensive university, apparently just so they can complain about it to complete strangers. As SLP posits in her dissertation prospectus, why bother?

Of course, these are things I knew already, things I had already pondered in the course of my life. But it’s easy to get swept up in that parade of the mundane, the minutiae of daily life, or to chase hollow symbols of “status” and “success,” and never really live.

At least, that’s what I’ll say until I get enough Benjamins to indulge in a bit of the bling-bling myself.