Apple against Luxury

What is not appreciated enough in most discussions around Apple Watch is how much it is an attack on luxury. Remember Vertu? It was virtually murdered by the iPhone. The luxury phone market was in its infancy, and it was not meant to survive. Nobody would want a Vertu now in their right mind.

You want the best phone money can buy, the budget unlimited? You get an iPhone. Maybe throw in a luxury $10,000 case, which will most probably make the device look cheaper.

Sony at times had tried to introduce a sense of luxuriousness into personal computing with special Vaio laptop models. The best thing money can buy today? A MacBook.

The reason for that is simple. Apple has mastered the art of mass production like no other company in history — not only they produce devices in tens and hundreds of millions, they also put unprecedented value in each of them. The fifteen years of Apollo space program cost roughly $100 billion in today’s dollars. That’s half the revenue Apple will make in 2015.

There’s just a handful of companies in the world that can boast a $5 billion yearly R&D budget. And for all we know there’s just one that is bold enough to focus all of those resource on a staggeringly tiny number of device models. It is safe to assume about $2 to 3 billion R&D dollars have so far been spent on just the first model of Apple Watch alone. The thing is, that budget is probably an order of magnitude more than all the money humanity has ever spent on R&D of every watch, luxury or not.

The reshuffling of the $60+ billion global watch market will be much more dramatic than a sudden death of a few luxury smartphone manufacturers or laptop series. You can currently buy watches for over $1 million apiece and in many ways what you get will be well worth it. In a few weeks the best watch money can buy will cost less than $5,000. Moreover, for less than $500 you’ll get the best watch in the world, but with uniquely crafted steel or aluminum instead of gold.

What’s happening is another bastion of status is going down. Yes, Apple is not Robin Hood. The products are only currently accessible to just one or two billion people on the planet. But the vector is clear.

By the end of this year, a billion people on earth will be able to use and wear virtually exactly the same phone, laptop and timepiece that the billionaires and millionaires will be using and wearing — the best that money can buy.

Now, what if clothing, shelter, food and transportation were disrupted in the same way?