Luxury Watches Sell for Thousands of Dollars. Is That How Much the Fanciest Apple Watch Will Cost?

(Apple)

Earlier this week, Apple CEO Tim Cook revealed a new addition to the company’s hardware lineup: the Apple Watch, which arrived in three distinct flavors: the classic Apple Watch, the Apple Watch Sport, and the Apple Watch Edition. Cook told a crowd of journalists in Cupertino that the smartwatch would start at $350.

The key word there was clearly “start.” Almost as soon as journalists were let out of the gates of Flint Center and into Apple’s boxy white showroom, it became clear that the three versions of the gadget were not created equal.

The Sport watch, which is made of light aluminum and a rubbery sweat-resistant band, will likely be the cheapest watch, the one that starts at $350. The confusingly named Apple Watch, which has a steel case, sapphire cover, and a choice of metal bands, will likely cost hundreds more; and the Edition — with its specially made 18-karat gold and rose-gold cases, sapphire glass screen, and understated Venetian leather bands — will surely command the highest price.

So if the price of the Apple Watch starts at $350; where does it end? How much will the gold-and-sapphire-constructed Apple Watch Edition run you?

It’s clear that the Apple Watch isn’t like the iPhone, where the next step up costs an extra $100. Experts say the fanciest version of the Apple Watch may cost anywhere between $1,000 and $10,000.

To understand that estimate, and its generous range, you must first consider how much we know about the materials that will be used in the Edition watch and what it might cost to manufacture them on a larger scale.

Though Apple has yet to reveal the weight of the Edition, the company’s description of its material — 18-karat gold and rose gold — indicated to many timepiece aficionados that the case would be solid, and not plated, gold.

“Apple has adopted a lot of the watch industry terminology,” Ariel Adams, a writer at the watch specialty site aBlogtoWatch, told Yahoo Tech. “If something is marked 18-karat gold, that tends to mean that it’s not gold-plated. Otherwise they would say ‘gold plated.’ ”

So, say the Edition watch uses 2 ounces — less than half the weight of an iPhone 6 — of gold total. The current market price for gold per ounce is around $1,200.

“That means that if there are 2 ounces of gold, which is not a lot of gold, in the Apple Watch [Edition], that’s $2,400 for just the raw material,” Adams said.

And that doesn’t take into account the process that Apple must first go through to mix its gold. The company claims it’s invented a new type of metal, one that’s twice as strong as regular gold.

Apple’s massive production scale makes it easier to get discounts on market prices. And its China-based manufacturing centers are likely far cheaper to run than those of highly regulated Swiss-based companies. Still, Adams suspects the complicated metallurgy and casting process involved in making a stronger gold into a rectangular case may very well add to the cost of manufacturing.

Apple is not the first to make a compound gold. Swiss watch manufacturer Hublot, for instance, makes something called “Magic Gold,” which according to its website is “an alloy of 1 carat gold surpassing traditional gold alloys in hardness and scratch resistance, while conserving the best properties of the ceramic and the gold.” Another Swiss manufacturer, Bulova, did the same with 24-karat gold. Both of those watches cost well over $1,000.

And then there’s the Edition’s sapphire glass casing. Though sapphire glass is commonly found on watch faces, experts see little room for revolutionizing its manufacturing process at a large scale. It’s an expensive and long process that, according to Adams, first requires the crystals to be synthetically grown in giant chambers. They then need to be cut into rectangles, which can sometimes take a long time. And finally the tops of those rectangles must be laminated, like the windshield of a car.

According to Adams, Apple will probably need to pay about $30 or $40 for piece of sapphire crystal, which may add an extra $50 to the price of the watch.

Yet comparing the double-digit prices of sapphire covered, forged-gold Rolexes with that of the Apple Watch Edition could be inaccurate, according to watch enthusiast website HODINKEE’s executive editor, Benjamin Clymer. That’s because most luxury watches’ prices depend just as much on something called movement: the number of things the watch measures, like hours, minutes, seconds, and moon cycles.

“I’d say other gold watches with sapphire cases start around $3,000 with a Swiss movement, and from there go up from $500,000, all the way up to $1 million,” Clymer told Yahoo Tech. “Because it all depends on the movement, really. If you put a simple movement in a solid gold case, it’d be $3,000. If you put a very complicated movement, it’d be more.”

Still, he feels the muted colors of the Edition’s leather buckle straps speak to a certain income bracket.

“The anodized gray — even in the Swiss watch industry — is becoming a symbol of sleek wealth,” he said. “Several of the highest, most expensive watch brands in the world are using gray, that kind of slate gray, on their dials, on their cases. A. Lange & Söhne, for example, their entire boutique, is this kind of nice, muted, but very elegant gray.”

It’s for this reason that Clymer’s initial estimate for the cost is around $1,000 or more. Similarly, Vontobel watch industry analyst René Weber told Yahoo Tech that, because gold watch editions tend to be twice the price of their steel counterparts, the Edition will “clearly be much more than two times the $350 price,” and he expects it to be above $1,000. As for Adams, he can’t imagine that Apple will be able to keep the costs of the materials and the labor-intensive manufacturing processes low enough to charge anything less than $5,000 and expects it could even reach up to $10,000.

When reached for comment, an Apple spokeswoman wouldn’t offer a price range for the watch.

“At this time, we’re just saying Apple Watch starts at $349,” she told Yahoo Tech.

According to Adams, that’s just the tip of the iceberg.

“The Edition is going to be far, far less mass-produced than the steel version,” Adams said. “I think it’s going to have a much different type of distribution. It’ll be a much more exclusive product.”

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