Everybody expected the Apple Watch to cost a premium over the smartwatches already on the market, but some people probably still gasped aloud when the company revealed that the 18-karat gold “Apple Watch Edition” will retail for $10,000 and up.
People will pay five figures for something of necessary utility, such as a car or medical care; if they have the money, they’ll even spend that amount on something they expect to last decades, if not generations, such as a traditional timepiece or piece of jewelry. But dropping the equivalent of a used car on a smartwatch, especially one loaded with hardware that’ll probably be outdated by this time next year? For many folks, that seems like total lunacy.
With the Apple Watch Edition, Apple is betting very big that there’s a small-but-significant group of people out there who, loaded up with a mind-boggling amount of disposable income, won’t mind dropping a portion of it on a watch that likely won’t appreciate in value, almost certainly won’t become an heirloom, and will definitely end up replaced in a year or two by a technologically superior model. Or to frame it another way: Apple is leveraging the full force of its brand capital to persuade people to purchase something they’d never consider buying if it came from another manufacturer.
If Apple wins its bet, and the Edition proves a wild success, will its rivals attempt to introduce smartwatches that double as status symbols? While it might not be a smart move from a business perspective, some might actually try.