Monday, March 9, 2015

Gold Apple Watch to sell for $10,000

This has been a fun story to watch (pun intended) as all kinds of speculation emerged on how much gold Apple might be buying for their new 18k gold cased watch. It looks like from what Apple revealed today that the impact on the gold market will be far less than some were speculating. Here is an article in Tech Crunch that explains the gold watch will start at $10,000 and go up to $17,000. There will probably be a fair amount of gold in the watch and the band combined (1/2 ounce or more), but it does not look like Apple is expecting to ramp up sales of the gold watch edition, at least not in the initial startup. 

Here is what Tech Crunch has to say about initial marketing plans for the gold edition of Apple Watch:

"Then there’s the Watch Edition, Apple’s high-end model equipped with a special reinforced 18k gold chassis, which will start at $10,000 in select retail stores and only be available in limited quantities. The Watch Edition will top out at $17,000."

With the high price tag and limited early availability, it is doubtful that Apple intends to market this gold edition watch on a mass scale. This means that speculation that Here is  expects to sell a million a month later this year looks off base. 

Apple could end up buying a fair amount of gold over time for these watches, but nothing like the 30% of annual production some articles were speculating. Something more like 5% a year seems more plausible based on how Apple intends to market the watch. Here is a video from Apple that shows how they make the gold case. Here is a brief article on the process.

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