So if the watch contains an estimated $1800USD worth of gold and the price of the base model is $349. Then the gold watch should be priced at $2499 or $2999.
I don’t see how people seem to be guessing the price at $10K. Everyone seems to be reasoning that "if Rolex can sell a $10k watch then so can Apple”.
I can’t find another watch maker that sales their base model for $X and then sells a similar model for $28X.
Not long to wait now.
In the research we did for this piece, we saw quite a few estimates of how the price of a watch breaks down, and there's always an intangible amount for "form" that goes beyond the basics of the object (the $349 in this case) and the cost of the gold. That's the value of owning a Rolex over some other brand, for instance, or having a watch that has some other special characteristic that sets it apart from other high end watches.
That's the big unknown... And the band. A lot of the gold in a Rolex is in the band, but Apple hasn't said anything about a gold band yet for the Apple Watch Edition.
No. Watch manufacturers and jewelry manufacturers price their products well above the price of the precious metal involved.
For example, Rolex prices a particular model in stainless steel with a stainless steel bracket at $6,000. But they price the gold version upwards of $25,000, even though the amount of gold in the case and braclet is about 5 ounces, worth about $6,000 itself. Therefor, they're charging triple for the gold.
This is normal. So if Apple uses two actual ounces of gold, with a value of $2,500, they could bump that to $7,500 in addition to the price of the watch itself, and not be overpriced as compared to the competition.
Apple claims that it's metallurgists have fabricated a gold that's twice as hard as regular gold, and it's MADE FROM 18k gold. The exact quote:
"Each has a watch case crafted from 18-karat gold that our metallurgists have developed to be up to twice as hard as standard gold."
That certainly gives them enough wiggle room to dilute the actual amount of gold required by a significant amount.
And where the hell are you getting your numbers that Apple expects to sell 1M Editions a month?
'And where the hell are you getting your numbers…'
From the WSJ, a fact this piece clearly and unequivocally states in its third paragraph. #TheMoreYouKnow
Third paragraph, first sentence. :-) The Wall Street Journal published those numbers, and the entire point of the article is show why they don't really make much sense.
As far as the 18-karat gold goes (fourth paragraph), unless Apple is changing the definition of the karat, that means that it's 75% pure gold.
You forgot KAOS, Agent Smart's nemesis. (Fun article - Thanks)
This article uses completely unrealistic premises. First of all, no one would want to have two troy ounces of gold (plus the additional weight of the non-gold guts) on their wrist. The weight would make wearing such a watch uncomfortable. More likely: the Apple gold watch will have an 'outer' housing, which will consist of 750/1000 gold, reducing gold demand per watch to perhaps 1/4 troy ounce of gold.
Looks like some Rolex watches weigh in at as much as 231 grams, with others at 99, 105, 130, 135, 137, 148, 168, and 221 grams. So if two troy ounces weighs 62 grams, it doesn't seem unrealistic that the rest of the watch would fit with the Rolex's range. The Pebble is 38 grams, for instance, and the Pebble Steel is 56 grams.
learn to read your sources...the wall street journal says 1M apple watches across all models, not 1M of the gold model. The source is a bit confusing...but wow this tidbit author should read the source twice. I want 500 M&Ms - the tastiest of which is red - in my hand. does not mean i want 500 red M&Ms..it just means red is available.
"Orders for Apple Watch Edition – the high-end model featuring 18-karat gold casing – are relatively small in the first quarter but Apple plans to start producing more than one million units per month in the second quarter, the person said. Analysts expect demand for the high-end watches to be strong in China where Apple’s sales are booming."
What exactly did I misread?
Well, this is according to "people familiar with the matter", who even state that order numbers are low -- so it's probably not more than the wet dream of some "analyst". (It does not take much to make it to media like the WSJ if you are an "analyst".)
It does absolutely not make any sense that apple would ship this number of a product at this price point, not in comparison to the high end watch market (which at least sells products which will probably last a century at this price) and also not compared to what Apple has been doing in the past.
you misread the intent. the high end model is a side note irrelevant to the number of orders. I'd expect at some point you learned that anything in a - is supposed to be supliforous. the sentence reads factually as:Orders for Apple Watch Edition are relatively small in the first quarter but Apple plans to start producing more than one million units per month in the second quarter
see...the number has nothing to do with the gold edition specifically. market watch picked up your mistake too. what a joke online journalism has become..don't you have editors?
Please desist with the personal attacks or your comments will be removed.
Our goal with the article was to point out the ridiculousness of the WSJ estimate by calculating out what those numbers might mean. The article was edited by two people, myself included, and I'm comfortable with what it says.
Interpreting the WSJ quote as you do is possible only if you're assuming that the WSJ writer and editors intended a change of subject from the beginning of the sentence (which talks about the Apple Watch Edition) to a clause that isn't even set off with a comma.
because it's offset with dashes...the structure is called an appositive. When an appositive contains commas dashes are used instead of commas. refer: http://www.grammarly.com/handbook/punctuation/dash/3/dash-setting-off-appositives-that-contain-commas/why WSJ chose to use dashes when their appositive has no commas, i am unsure, but it's still a rather simple grammar rule. Some simple google shows that using - to offset an appositive is allowed: http://www.dailywritingtips.com/4-punctuation-marks-for-forming-appositive-phrases/
so I think it's pretty clear the article source was misrepresented, the WSJ never claimed 1M gold watches. just 1M watches.
I agree the WSJ wording could be considered confusing, but it's pretty clear that the misinterpretation is on the behalf of this tidbit author.
I think the responsible thing to do would be to own up to it and add an update to the article. Or at least verify the intent with the WSJ.
The appositive merely describes the Apple Watch Edition and doesn't signal a subject change. Take it out and you get:
"Orders for Apple Watch Edition are relatively small in the first quarter but Apple plans to start producing more than one million units per month in the second quarter."
If the intent is change the subject, it's badly written. If not, it's badly reported.
Regardless, this deceased equine has suffered enough.
I can't grasp the meaning of "If anything, too much popularity may limit sales."
Yeah, now that I look at that closely, it's worded badly. The point is merely that exclusivity matters, and if the Apple Watch Edition becomes too popular, it won't be sufficiently exclusive any more. Having a Toyota (however well made) isn't exclusive; having a Ferrari is.
But obviously, if it's popular, sales won't be limited, even if it's not longer desirable to the high-falutin set.
I'll tweak it to reduce the confusion.
As Yogi Berra (probably never) said: "Nobody goes there anymore, it's too crowded."
I'm sorry but this is complete nonsense - Apple might sell one million watches / month at some point (although I really doubt it but well what do I know ?) but never, ever, that many high end gold models. There is no if here, I'm 100% convinced that the product mix will always at best be a few percent of the gold model, the WSJ can write whatever they dream of. I'm happy to take the bet :=)
I think the WSj is beholden to clicks too, hence clickbait...
This story's analysis is hopelessly flawed. If you compare what we can see of the Apple Watch Edition to a gold Rolex, you can't help but notice that there are no gold Apple Watch pictures with gold (or even metal) bands. The weight of the empty watch case is about ½ the weight of the metal bracelet. Now I don't have a gold Rolex to disassemble and weigh, but some nice people over at eBay claim to have done so (http://www.ebay.com/gds/How-Much-Gold-Is-Really-In-A-Rolex-Watch-/10000000001632748/g.html).
These numbers *seem* to make sense. Their data shows the weight of a the gold Rolex watch components without the band are about 31g, which means 23g of 24K gold, or 0.81 ounces. So 2 ounces is +146% than you'd see if Apple Watch contained as much gold as a Rolex. Just looking at the Apple Watch it's pretty clear there would be less gold--it has a very large front crystal, and a "crystal" on the back. Considering the Apple Watch will employ the design and assembly technology we've seen in iPhones, then the case is likely to be much thinner, and contain considerably less gold than a Rolex. My guess is that the 18K gold case would weigh no more than 18-20g, and thus about 13-15g of gold. At today's price of $1169 that's worth about $535. "2 oz of gold".... Ridiculous.
Why is there no mention in the article or comments of the extremely harsh environmental impact of mining what's left of the planet's gold? Gold mining is a toxic travesty and purchase of any new gold is the sort of "Gimme, I want" ignorance that is ruining our Earth. If you have no idea what I'm talking about please get educated. A good place to start is http://www.nytimes.com/2005/10/24/international/24GOLD.html
Estimating 2 Troy ounces of gold is a quite a substantial difference from the strategy they are using.
A fairly recent patent shows that they will be using 43-53% LESS gold than typical 18K gold jewelry - http://leancrew.com/all-this/2015/03/apple-gold/