Tim Cook's upcoming move to take over your wrist is not a smartwatch, even if it loosely fits the definitions that the geekerati have been working with over the last few years. Instead, the Apple Watch is an idea; it is status and standing; it is aspiration and achievement.
To borrow another marketing phrase, this is not just a watch, this is an Apple Watch.
Much like the launch of the first iPhone, Apple debuted the Apple Watch more than half a year before its general availability. Apple stayed in control of the message of the watch, rather than allowing the supply chain to leak each function component by component. It allowed Apple to position the watch as a fashion accessory and to show it off during Paris Fashion Week, on the wrists of supermodels, and in the glossies around the world. It gave people time to appreciate that the Apple Watch is about more than seeing your notifications on your wrist, counting your steps, or sending your heartbeat to your partner.
The Apple Watch is a personal piece of branding that says everything about the wearer. Yes it will perform many of the same functions as the currently available smartwatches and fitness trackers in the $100-$200 price bracket, but in the same way that any Italian sports car can be used to pop down to the 7-11 for some more Irn-Bru to drink, the point of the Apple Watch is not necessarily about function. It's about fashion.
And this is perhaps the most audacious part of Tim Cook's plan for the Apple Watch. It has taken time for the smartphone ecosystem to shake itself out and everyone to find their own level. Almost every Android manufacturer is now looking at less expensive handsets, while Apple has carved out and defended the high-price high-margin high-function space. That has taken time to achieve, but it has ensured that the lion's share of the profits in the market have flowed to Cupertino (at which point, I have to link, once more, to the blowout numbers of Q1 2015).
Tim Cook is not waiting around with his wearable. The Apple Watch Sports might be coming in at the $350-$400 mark - high but not out of reach of the average iPhone user looking for a wearable, but I can't see Apple making a huge margin at this price. After all, financial success would require a high-volume low-margin approach, and that's not the Apple way.
Above the Sports collection you have the 'Apple Watch' with a branding that suggests this is the default model. The stainless steel edition is expected to cost upwards of $1,000 and is where Apple will be making a margin commensurate with those Q1 numbers. In steel, the Apple Watch is a clear status symbol where the look of the Watch is more important than 'just' the features (which are likely to be the same features across the portfolio). People will want to be seen with the Apple Watch, because it speaks to how they want to be seen and perceived.
Once the Apple Watch goes on sale, I think we will all see that Tim Cook is not selling a smartwatch, but instead is selling status. And if there's one thing that Silicon Valley and the geekerati leaders love, it's a status symbol.
Do I really need to lay out the implications of a $20,000 18 karat solid gold Apple Watch?
