Apple is the world’s premiere smartphone brand, but that isn’t a secure spot. To cement it, the Apple Watch—especially the gold one—aims to turn Apple into a luxury fashion and lifestyle brand. Apple’s director of retail, Angela Ahrendts, has been down this road before, and I wouldn’t discount her savvy in making that happen.
The Apple Watch is made of parts found on other smartwatches, and performs some perhaps unnecessary tasks. I don’t actually want to make phone calls on my wrist, and while Apple’s third-party SDK is the most appealing wearable SDK yet, it’s all potential. The components aren’t there yet for an effortless wearable experience.
Nobody can really solve the technology problems of smartwatches right now, so Apple is attacking the marketing issue from from a cultural perspective. The $10,000 gold Apple Watch isn’t a gold-plated gadget; it is a gold status object that just happens to be a gadget, and an attempt to maintain Apple’s status as a luxury brand.
Ahrendts, now Apple’s director of retail, turned Burberry into a fashion status brand. She understands that to be truly aspirational, you need products that not everyone can buy.
“In luxury, ubiquity will kill you—it means you’re not really luxury anymore. And we were becoming ubiquitous,” she once told the Harvard Business Review about Burberry. The world’s No. 1 smartphone balances gently on the fence between luxury and ubiquity, between being a status object and a universally needed tool. The gold Apple Watch helps re-weight those scales.
The idea of a midmarket/luxury technology brand isn’t that bizarre. That was Bang & Olufsen’s wheelhouse for years. Nokia’s Vertu brand spent a happy decade starting in 1998 selling bling-laden feature phones in Russia (and there are more arcane luxury phone brands, too, like Mobiado). We did a slideshow of super-luxury phones back in 2007.
The idea of higher-end luxury models creating a brand halo effect for more affordable models is perfectly well known in the auto industry; as Farooq Butt said to me on Twitter, the performance of BMW’s M-series tends to sell a lot of cheaper 3-series cars. Apple’s been called the BMW of the tech industry more than once.
It’s Not About Taste
You may raise the question of taste, but taste works differently in different places. There are key differences between old money and new money, democratic money and oligarchical money.
All of these forms of money have no problem spending $10,000, or even $20,000, on a watch. Luxury watches are a time-tested status signifier.
On Twitter, Kevin Taylor posed the question of whether a Breguet or an Apple Watch will maintain value, but he’s thinking from an old-money perspective, which wants to be a little quiet and to think long-term. The Apple Watch is new money: it says not only that you can spend $10,000 now, but that you want everyone to see that you can afford $10,000, and that you’ll spend $10,000 again again a few years from now without much concern. And remember, these are the people who spend $10,000 for first-class airfare.
How many of these oligarchs are there? Well, if you see a $349 gadget as a reasonable purchase for someone making around $75,000 a year, the $10,000 watch is the same proportion of income for someone who makes a little over $2 million per year. There are about 100,000 people who make more than that in the U.S. alone. And yes, some of them, probably Kardashians, will buy the gold Apple Watch and wear it everywhere.
You can then go down a rabbit hole and try to figure out how many people make more than $2 million in China, but it’s irrelevant, because the Apple Watch there is designed to be about status, not income. It will be given as gifts from officials to their mistresses, and from businessmen to officials. It is designed to be a form of status currency.
It’s interesting that the watch’s other most striking feature is also social: the touch communication. Insanely intimate (especially with the heartbeat) it’s designed to make Apple watches be sold in groups of two, at least.
For the watch to require an iPhone can also be seen as a plus, rather than a minus. The goal is to sell as many Apple products as possible. Especially in China, where Apple is losing some prestige as a phone brand to local rivals like Xiaomi and Huawei, the aspirational watch could now put the aspirational phone back in the hands of taste leaders like China’s First Lady, Peng Liyuan, who was recently seen holding a ZTE Nubia.
I’d never buy an Apple Watch, but it isn’t for me. It’s not my style. But make no mistake: style is what it’s all about.