There are very different motivations and target market for that kind of purchase. The Apple Watch won’t disrupt the market for people interested in spending $25,000 or more on a watch – not yet anyway. The high-end Apple Watch will be aimed squarely at the lower end of the luxury-watch market. So, what does an all gold Apple Watch between $5,000-$10,000 do to the existing luxury-watch players with products at the sub $15,000 level? In a word, disruption. If I were Apple, I would price it above $5,000. And that watch will be priced north of the $1,000 price point. What’s the sixth? I would assume it’s an Apple watch with an all-gold band. You’ll see that it says, “The Edition collection features six uniquely elegant expressions of Apple Watch.” Well, there are only five watches displayed on the page. Now, look at the Watch Edition section of the site. That combination will attract many consumers at the sub-$1000 price point with the stainless steel and sport editions. They have six product categories with the watch as one of them. But their business model is about to undergo another wave of disruption, as Apple takes aim at the high-end watch market.Īpple is betting big on the Apple Watch. The remaining luxury watch companies refocused on a more limited pool of wealthy customers and the industry hasn’t changed much since. It survived only after it underwent significant retrenchment and consolidation. By the 1980’s, Quartz watches were also much cheaper, so they had mechanical watches beat both on function and price.Īs a result, the luxury-watch industry was almost destroyed. Mechanical watches’ hallmark was their accuracy, but quartz watch movements were much more accurate than mechanical movements. It happened in the 1980s, when quartz watches flooded the market. This won’t be the first time the luxury-watch industry has dealt with disruption from a serious competitor. This means that Apple’s new watch will pose a significant challenge to the industry’s long-standing business model. While estimates vary, but most analysts suggest that Apple will sell about 24 million watches in 2015. This has long been the calling card of the luxury-watch industry, which matches beautiful design with mechanical precision. What Apple has been able to do so eloquently is balance consumer utility with design. Many of the major luxury-watch makers have been sending cease-and-desist letters to websites that allow you to download imitations of their watch faces that can be used on smartwatches. The luxury-watch industry is already feeling the pressure. With the next wave of high-end wearables on the way, the problem is about to become very apparent. The luxury-watch industry is about to undergo another wave of disruption, and the first step to solving a problem is to recognize that there’s a problem in the first place.
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