Apple is giving up on the luxury watch market

AppleAn ad for the Apple Watch Herm├ęs line.

When Apple released the original Apple Watch in early 2015, it made a a pretty big play at the high-end watch market with its Edition line, which started at $10,000 and was encased in precious metals.

Most bloggers and technology journalists scoffed at this as a gimmick, but Apple was serious in its efforts. It gave celebrities like Beyoncé and designer Karl Lagerfeld the pricey watch to cultivate an air of exclusivity. The Apple Watch’s first ads appeared not in a tech publication like Wired, but in Vogue.

With the announcement of the Apple Watch Series II at Wednesday’s keynote, however, the only model that carries on the Edition name has a white ceramic case and not a glint of bling in sight, and it sells for a comparatively low $1,299. The most expensive Apple Watch is part of the Hermés line, which pairs the watch with leather straps made by the French fashion house and is priced at $1,499.

The removal of the super-high-end watches from Apple’s offerings is telling.

“Apple is making an admission that it’s not a luxury product in watches,” James Dowling, co-author of “The Best of Time: Rolex Wristwatches” told Bloomberg.

Lisa Eadicicco/ Business InsiderThe ad for the Apple Watch in Vogue.

Anyone who knows about the luxury watch market could tell you that selling expensive technology with a tendency to quickly become obsolete would likely not turn out well for Apple. Those who spend that kind of cash on things you wear on your wrist aren’t looking for the latest tech, and they don’t want to have to replace it next year (or maybe ever).

Customers buying Swiss luxury watches are looking for both legacy and longevity, something that watchmakers like Rolex have in spades.

Rolex AdRolex AdLike the Apple Watch ad, the ad for this Rolex has no marketing copy and features the watch on a white background.

On top of that, the Swiss high-end luxury watch industry is in the midst of a serious downturn, which has shrunk the market at the same time Apple was looking to burst into it.

“[Apple is] making a declaration that it’s no longer in the watch business, but that it’s in the health-tracking business,” Dowling said.

During its keynote Wednesday, Apple devoted far more time touting its newly deepened collaboration with Nike for a new line of sports watches. Wearables will likely be a category Apple can much more easily dominate than trying to chase the picky buyers accustomed to Swiss heritage and luxury.

Swiss watchmakers may take this as a sign that they were right not to chase Apple into wearables, instead remaining staid and relying on the strength of its legacy.

Just like the Swiss watchmakers were able to fend off cheap quartz-powered watches in the ’70s and ’80s, they have forced Apple downmarket and out of the luxury watch category.

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