Apple could make serious money from its first experiment with a luxury item, John Gruber writes.
The new Apple Watch, expected to launch in April, is going to come in three different variants. The cheapest model is the “Sport” version, which comes in bright colours and will retail for $US349.
There’s a mid-range tier of Apple Watch which will feature a silver body and sapphire screen. That is expected to cost nearer $US500.
And there’s also a high-end gold version of the watch called the Apple Watch Edition.
We still don’t know exactly how much the gold Apple Watch is going to cost. Most estimates place the price between $US4,000 and $US5,000, though.
Here’s what the gold Apple Watch looks like:
The Wall Street Journal reports that the 5 million run of Apple Watches will be broken down like this:
- 2.5 million will be Apple Watch Sport models.
- Around 1.6 million watches will be the middle-of-the-road silver version.
- That leaves around 900,000 watches left over — presumably the allocation for the gold Apple Watch Edition.
Tech writer John Gruber has worked out that if Apple sells its allocation of the gold Apple Watch at a $US5,000 price, then it stands to gain $US5 billion a quarter in revenue just from that device. That’s not even taking into account the cheaper (and presumably far more popular) Sport and silver models.
Gruber’s calculation is interesting because it shows that Apple could earn far more money from the sale of the high-end, exclusive product than the selling volumes of the cheaper versions (although he Gruber doesn’t make predictions about the margins for either model.) Apple design head Jony Ive hinted in a recent New Yorker profile that more designs of the Apple Watch are on the way, so it’s feasible that Apple could be working on an even more expensive of the device in the future.