Oct 6, 2014 — by: E. Werner Reschke
Categories: iPhone, Tim Cook, Carriers, Apple Watch, Apple Pay

Tim-cook-apple-watch

After years of anticipation, Tim Cook delivered his first new product category: Apple Watch. Apple Watch was the “one more thing” at September’s keynote. It was not only a new product category for Apple it was also an extension of the iPhone and Apple Pay.

Much of Cook’s time was spent showing off the new interface, how the digital crown worked and the usefulness that Apple Watch will bring to those who wear it. It certainly will be like no other watch ever crafted before when it makes its debut in early 2015. However, the one item that could keep sales from skyrocketing is the price.

Starting at $350 USD. This is a bit worrisome. While iPhone launched with a nearly $600 price tag, mass adoption of iPhone only came about when carriers began subsidizing the initial price making new iPhones $199, $99 or even “free”. Imagine if iPhones had no subside and the cost was $729 to purchase a 64GB iPhone 6. Well that is the real cost and what you would pay without carrier subsides. If that were the only way to purchase iPhone, how well do you think it would sell? If you answered not as well, you are correct. The iPhone would still be popular in desire but not as well distributed in the market place.

With Apple Watch consumers are being asked to shell out $350 for the base model. What do the other models cost? Does that base price include a wrist band, and by the way how much do the wrist bands cost? If $350 were the median price this might be okay, but look around you. How many people do you know that wear $350 watches today? Will Apple Watch with Apple Pay be enough to change purchasing habits? While the 18-35 demographic led the way with mobile device adoption, not many of this age group wear watches. Will that change with Apple Watch, starting at $350? Again it begs the questions is the price too high, and is there enough perceived benefit (including fashion) to drive 18-35 years olds to purchase something they may have never owned before?

Sure Apple Watch will be popular. The desire for one will be great just like with iPhone. However the key question is it too expensive for mass adoption — not just elite class adoption.

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3 Comments

  1. Peter ~ Oct. 6, 2014 @ 10:49 am

    I gotta admit, I think it's a bit high myself. That said, here's an interesting piece of trivia: The iPod, when it was first released in 2002, was $399. We sort of forgot about that--I think that was a bit pricey, too, compared to it's competitors. Apple TV was also a few hundred dollars, I believe, compared with the $99 version now available. I think Apple Watch is going to be somewhat of a "hobby" in the beginning, as developers and customers try to figure out what to do with it. Remember the old mantra, "Software Sells Systems." So it isn't worth trying to bring in a a few hundred million people in the beginning and then have them sit around and wait for something worthwhile to happen. #
  2. Jim Stead ~ Oct. 6, 2014 @ 5:34 pm

    Don't tell me. You're concerned sales are low so far. It's a new product that will follow the same trajectory other Apple products have. Lower in round two. #
  3. mhikl ~ Oct. 7, 2014 @ 8:43 pm

    My question is how long will it be updated or even updatable? It is classy enough that if it really extended iPhone’s usability, then it might be worth it. That said, I never buy any Apple first edition. •I remember the first iMac that came only with usb so I chose the last Mac All-in-one, the molar, which I could add three port card and I added usb. It was top of the line and my fav computer all round. It took so many updates from OS 8.0 to 10.2.8 and with each update became faster. 'The Beast', as my gf at the time called it, weighed 58 lbs and gf, soon to be wife, had a time moving it for me, but she managed. Come to think of it, I haven’t seen “The Beast” in the basement for some time. I wonder where it went. Must go. Namaste and care, mhikl #

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