Why Apple’s Most Expensive Gold Watch May Be Cheaper Than You Think (But Still Expensive)[Updated]
All the fuss and speculation about Apple’s top-end Watch may be off by thousands of dollars. Because of physics. Paradoxically science may also make the Watch more luxurious than many rivals.
Gold is a funny thing: We treasure it, value our economies on how much of it we own, yearn for it and make incredibly precious and expensive things out of it. But speaking of gold as a metal, it’s actually pretty weak—being so soft, when pure, that in many cases the precious, expensive things we make out if it are very easily damaged (such paradoxes define the human condition I suppose). Luxury watches are one of those precious, expensive things, and anyone owning a pure gold watch will know that over time the body picks up tiny scratches and marks through pure wear and tear (if you’re not a luxury watch owner, take a look at your wedding ring to see the effect).
So when Apple revealed last year that it was going to release three different versions of its Watch, with the top-end one being made of 18k gold, it really set the media’s fingers typing. Pure gold is expensive, but it’s also not the best material to make a watch out of—and maybe the most expensive Watch body would be more easily damaged than the mid-level stainless steel device or even the entry level aluminium one.
The 18k gold label also set off a lot of speculation about the Watch’s price. If, as commentators like John Gruber have calculated, the Watch contains about several ounces of pure gold then its price could, by sheer economics of gold pricing, easily spike towards $10,000 and even upwards of this figure if you include gold straps on the device.
Incredible. Expensive. But also…plausible: Assuming Apple is intent on rivalling the existing luxury watch market in a meaningful way, then selling a device with a massive real price should add a massive perceived value to its watches, which analog horophiles may otherwise sneer at (due to the Watch’s “high tech fripperies” or somesuch). By definition a high price confers a degree of luxury onto the thing bearing the price tag.
We may guess, based on these assumptions, that the three Apple Watch versions will cover a price bracket from $349 to well over $10,000 depending on the variation of body and strap that buyer chooses.
But hold on a minute.
Apple isn’t known for taking the boring-old low-tech approach to anything. Legitimately anything: Look at the incredible, complex, innovative way the company makes the “simple” cylindrical body of its luxurious Mac Pro computer.
And now look at this Apple patent that’s surfaced and is being discussed online in a number of different places: It’s for a composite material that’s already cheekily being called “Apple Gold”. Apple Gold is, thanks to some clever science, technically still 18k gold (because the karat standard is determined by weight, not volume) even though it contains perhaps a third of the gold by weight of a “pure” gold block. It’s also mechanically stronger.
The trick is achieved by embedding gold in a metal matrix composite, with gold atoms mixed with ceramic powder particles. Ceramic-based composites are known for their hardness and scratch resistance and, compared to structures made in other materials, relative lightness. Apple’s patent describes how the metal matrix composite is forced into a die mold for high-precision shaping, which totally tallies with the complex shape we’d expect an Apple Watch chassis to be.
Look at the three bold words in the previous two paragraphs, and suddenly you’ll see what Apple has planned here.
By applying some clever physics and materials science, Apple can sell an 18k gold watch that’s both lighter and stronger than many 18k luxury watches sold by its new peers in the luxury watch business. If the cost savings in gold by weight aren’t offset by the cost of manufacturing the metal matrix composite (and I expect that they aren’t going to be) then Apple could also sell the 18k gold Watch Edition for many thousands of dollars less than the price of pure gold could dictate.
Notice I say “could” there. The cost savings in gold are incredibly important for Apple. They let the company play with the profit margins it achieves from the top-end Apple Watch as well as its price. Apple could easily sell the watch at a premium price bracket with prices near $10,000 to achieve the luxury cachet of such a price (and it would also have a high-tech luxury cachet due to its uniqueness), and rake in hundred of millions more dollars in profits. Or it could drop the price to something less insane sounding, and sell the gold Watch for $5,000 or more and achieve less profit per item, but perhaps more profit in total because they would sell more by volume.
I have no idea what prices Apple will reveal in just a handful of hours, but I’m betting on a slightly lower price for the top end watch than has been speculated.
Because there’s always the possibility that in future it could sell an even more expensive Watch made out of an even more precious and expensive material:
Ah yes, now you’re thinking…
UPDATE:
Apple’s just revealed the final details of its Watch, with all the other two editions having some clever metallurgical tricks in their body designs.
Pricing for the Edition gold version starts at $10,000. So that clever metal matrix, if indeed it is in use (and I bet it is) is all about controlling material stiffness and—more importantly—price and profitability for Apple.
Images under CC from Flickr user Milena Mihaylova, and Edward Olive, and from Apple.
