• On the Upgradability of the Apple Watch

    I didn’t think Apple Watch Edition pricing would start at $10,000. Even though John Gruber was confident that was the correct range, and even though when he’s confident he’s almost always right, I still just had a hard time accepting they would price it that high. One of the key reasons to me was upgradability. How on earth would Apple sell a watch for $10,000 when all the technology inside of it would surely be outdated in a few years.

    The New Yorker addressed this point in an article on their blog this morning. They compared the Apple Watch to Vertu phones and luxury cars:

    Apple will face another challenge with its Edition line. The luxury watchmaker Patek Philippe advertises its watches with the tagline “You never really own a Patek Philippe. You merely look after it for the next generation.” The point, of course, is that Patek Philippe watches—many of which are priced at twenty thousand dollars or more—are investments. Like art, they don’t lose value as time passes; they may even gain value. It’s hard to make the same case with an Apple Watch; at best, new technologies last for three years or so before they are seen as obsolete. “If you spent ten thousand dollars on an Omega gold watch, theoretically, in two years time, it should hold most of its value,” Bassel Choughari, a luxury-goods analyst at Berenberg, told me. “What are you going to be left with in three or four years time with your fifteen-thousand-dollar Apple Watch?”

    Apple executives are surely aware of this issue; it could be one of the reasons the Apple Watch is built with removable straps, which can, at least theoretically, be removed from an obsolete watch and attached to the next version when it comes out. There is also some precedent for attempting to sell luxury tech products. A British firm called Vertu makes high-end smartphones that sell for tens of thousands of dollars. “A phone is more, in a way, like a car,” Vertu’s creative director, Ignacio Germade, told Sam Byford, of the Verge. “You don’t buy a luxury car because you want to buy it for the next 10 years or 20 years or 100 years; you buy a luxury car because even if you use it for two hours every three days, you want to have the best experience that you can have. If you look at the difference between when you buy a car and when you sell a car, you will realize that it’s actually a huge investment for a product that you use a few times a week.” Notably, in his Profile of Ive, Ian Parker quoted Ive’s friend as saying that Ive was “very interested” in Vertu.

    This makes some sense, even if I still feel uncomfortable with the idea of Apple entering the luxury market. Indeed, in the magazine’s profile of Jony Ive a few weeks ago, the author explicitly mentioned Vertu in the context of Ive’s interest in making luxury goods:

    A few years ago, Grinyer had considered working with Vertu, the British-based cell-phone manufacturer, whose bejewelled but technologically ordinary products sell for tens of thousands of dollars. Vertu’s survival challenged the assumption that inevitable obsolescence removes modern consumer electronics from consideration as luxury goods. Ive was “very interested” in Vertu, Grinyer recalled.