Market Insight

Apple reveals Apple Watch pricing

March 10, 2015  | Subscribers Only


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The Apple Watch will come in two sizes (38mm and 42mm), three version (Apple Watch Sport, Apple Watch, and Apple Watch Edition), and two colours per version for a total of 12 variants.

Prices for the Apple Watch will range from $349 for the 38mm Sport model, to $549-$1099 for the stainless steel model, to $10,000-$17,000 for the gold and rose gold ‘Edition’ model. The number of Apple Watch Edition shipments will be limited.

The Apple Watch will be compatible with iPhone 5’s or newer, running iOS 8.2 or later. iOS 8.2 will come with a inbuilt Apple Watch app.

The smartwatches will ship on April 24th to USA, UK, Australia, Canada, France, Germany, Hong Kong, Japan and China.

Our analysis:

Apple has crucially included China in its initial roll out of the Apple Watch. In its keynote, Apple demonstrated WeChat application, China’s leading instant messaging mobile platform, on the Apple Watch. Apple’s presence in China has been growing since the introduction of iPhones in China’s mobile network operators’ portfolios. Apple has expanded its retail footprint in China and now has 21 stores with plans to further expand. By expanding its presence, Apple will hope to capitalize on the aspirational image its brand maintains in the Chinese market. 

The smartwatch market is still undefined, unlike the smartphone market now but similar to when Apple launched the iPhone. A number of companies have tried to dominate the space, but have so far seen limited adoption. Devices from: smartphone OEMs such as Samsung and LG, startups such as Pebble or Martian, wristwatch makers such as Swatch or Timex, and even fitness trackers such as FitBit or Basis have all entered the smartwatch space over the past year. Even so, IHS expects the Apple Watch to become the bestselling smartwatch in 2015.

Although this could create some logistical and inventory issues, Apple’s choice to manufacture multiple models of its smartwatch will prove successful. Unlike smartphones, which are usually either in pockets or handbags, a smartwatch will be part of a person’s appearance. By offering multiple models and interchangeable bands, consumers will be able to select the material of choice and customise the band to match a particular outfit or situation.

Another key element for smartwatches is endurance and durability. Like fitness devices and modern wristwatches, smartwatches benefit from waterproofing and dustproofing. Consumers paying a premium for a device meant for near-constant use will want to feel certain that their device will not be damaged by water exposure. The Apple Watch face has an IPX7 meaning it is water resistant, but not waterproof, and will withstand exercise, washing your hands, or being in the rain, but the watch band chosen may be affected.

However, the main Achilles’ heel of all smartwatches has been the battery life. A multi-day battery life has been a key element of smartwatch pioneer Pebble’s success that recently touted 1 million shipments over the past 2 years. Apple has stated that the Apple Watch will last 18 hours with typical usage, which means it will likely require daily overnight charging. This will make the Apple Watch impractical for sleep tracking, which has been one of the main features of existing wristworn devices. The battery life will also be an issue for consumers who have forgotten to charge their device will run out of battery mid-day. Apple has partially offset this problem with a power saving mode, but that limits some of the functionality that Apple is marketing.

The Apple Watch will bring media attention to this sector which will affect the entire smartwatch industry. Other smartwatch manufacturers will benefit from Apple’s marketing. IHS expects 2015 will be the year that kickstarts the smartwatch industry into motion. 

 

Organization
Apple Inc.
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