SAN FRANCISCO – Apple made a play for the truly affluent on Monday with a watch – priced as high as $17,000 – that is aimed at shaking up not Samsung or Microsoft, but some of the most iconic fixtures of the fashion world.
The computer company has long priced its gadgets and laptops at a premium over other electronics. Some middle-class consumers may have had to stretch a bit to buy the latest gear. Yet the products were still affordable enough to become common fixtures at home and work.
But with a timepiece wrapped in 18-karat gold, Apple is now aiming to create something no consumer electronics company has ever tried before: a status symbol for the 1 percent. That aspiration makes sense for a company that is trying to portray itself as a luxury-goods maker and perhaps because of the increasing spending power of the super wealthy around the globe, retail analysts said.
Still, the $10,000 starting price tag of the gold watch provoked audible gasps in the audience when it was announced by Apple chief executive Tim Cook at the Yerba Buena Center for the Arts in San Francisco. Apple appeared to be going for a different reaction when it introduced the watch with a film of fashion model Christy Turlington Burns wearing the device while speaking to a sick mother in an African hospital and then running a half-marathon near Mount Kilimanjaro in Tanzania.
Retail analysts are split on whether Apple, for all its success, can cast itself as the Silicon Valley equivalent of Rolex, Louis Vutton or Chanel. That fans of the computer company camp overnight for the next version of its iPhone or iPad may discourage the affluent from visiting a store to buy a gold watch.
Luxury watches are often purchased for their heritage – a vintage timepiece only gets more special as the decades go by. They’re often passed down from parent to child. Traditional watchmakers still use the image of the elderly Swiss artisan, bent over a spread of gears and tiny tools in a dusty room, in ads for their upscale timepieces.
But if the Apple Watch is iterated as often as other gadgets such as the iPhone and iPad, with previous models cast aside in a year or two, experts say it will be tough to convince luxury shoppers that such a purchase is worth the investment.
“Anything Apple puts out there, at some point it becomes obsolete,” said Rony Zeidan, creative director of luxury branding agency Ro New York. “So spending $15,000 if you don’t think of the technology aspect, is fine. If you do, it’s probably more of an ego buy than anything else.”
Apple said it would make a limited number of the gold watch – simply called the “Edition” – and sell them in “select stores,” such as Selfridges in London, Isetan in Tokyo or hip boutiques such as Maxfield in Los Angeles.
“That’s probably their way of saying it’s not going to be in the mall,” said Ken Nisch, a retail strategist. “I think they’ll have these in key places – gateway cities like Miami, San Francisco and New York.”
To aid its transition into the fashion world, Apple has been hiring a slew of fashion designers from the likes of Burberry, Tag Heuer and Yves Saint Laurent. Retail analysts said if Apple decides to sell the watch in its own stores, it will likely need to create a private space for VIPs, put in full-length mirrors and keep the watches behind glass.
Apple’s new watch will likely be made on assembly lines in factories in Asia that also manufacture the hundreds of millions of smartphones and tablets that the company sells every year. Apple is making several different watch models, priced between $349 and $1,099, that it believes will sell well among middle-class consumers.
On stage, Apple demonstrated how the watch can send and receive texts, act as a hotel room key or answer phone calls. (“I’ve been wanting to do that since I was 5 years old,” joked Cook.) The devices will wake up when you move your wrist. And, notably, unlike traditional watches, they will need to be charged almost every night.
Users will also be able to customize the touchscreen watchface. Like other wearable technology, the watch will serve as a fitness device, monitoring how many steps a person has taken and how long a user has been sitting.
The move into the watch industry has unnerved brands such as Fossil and Movado, whose stocks have been falling since Apple announced it would make a timepiece last fall. Those shares took another dive Monday, with Movado Group declining 2.3 percent Monday and Fossil Group falling about .6 percent in regular trading.
Apple also unveiled an update to its Macbook lineup, shrinking the laptop to 13 millimeters and shaving it to two pounds. The laptop will now come with only has one connector that will take in power cords, USB ports and other peripherals.
But the watch was the main event during Apple’s presentation and marked several firsts for the company. It is the first new product category for the company since launching the iPad in 2010. It is Apple’s first wearable device. And it is the first time the company has ever tried its hand, really, at making techy fashion pieces rather than simply fashionable tech.
Some analysts thought it could take some time for the watch to catch on. Ramon Llamas, a wearables analyst for IDC, said that he expects the watch to sell about 22 million units in its first year. And most of the customers, he said, will go for the lower-end watches.
The more expensive version? It might evoke some skepticism.
“Some of the luxury consumers that are high net worth individuals in China or Abu Dhabi who are ostentatious might find the watch very appealing,” said Charles Lawry, an assistant professor at Pace University who studies luxury marketing. “Some of their more European or American customers – they typically buy products based on their esteem and their heritage. I think they may still struggle to buy into the concept.”
