The controversial Apple Watch stats and why they shouldn't be taken seriously

Today's article will start with this intriguing first line:

Yesterday, the new Apple Watch was released at Steve Jobs theater.

What may seem like an inoffensive affirmation is, in reality, a controversial theme that includes marketing questions and positioning definitions.

When presenting the new Apple Watch with all its features, Apple made the “clever” decision of showing their latest stats about their revenues about that specific product that they were presenting.

Apple watch “flop” outsold Rolex, Omega and the rest of the Swiss top sellers brands.

This generated a controversial confirmation of facts that in my opinion is important to establish how gadgets, because the smartwatch it's a gadget, are being compared to mechanical watches.

THE STATS

Rolex, the Geneva based colossus, is the only non-group owned Swiss watch brand that makes it to the top of Watch Market Leaders by Sales Revenue, once again, a colossus.

In fact Rolex has an estimate sales revenue of 4,5 billion annually, and it's actually a value that I believe that will keep rising over the next year too, but the watch market price increase is a whole another topic that requires an article on its own. Maybe for a future article?

Back to the stats, I’m explaining the Rolex case in specific so we can have a base of comparison to the Smartwatch and how it is not comparable.

The first Rolex price climb is dated to 1980, where, for example the Rolex No Date (5513, 14060, 114060) prices started at 1,000 dollars, 30 years later the Rolex No Date has a price of 8,000€.

This is an aspect that only Rolex has been capable to do with steady increases over the years without major changes on product design.

We can now start to see a big difference facing Apple’s Smartwatch, we shouldn't compare this price stats between smartwatches due to lack of yearly stats and due to the smartwatch fewer years present on the markets.

DON'T TAKE IT SO SERIOUSLY

So, let’s compare it with the only product that, apart from the years present, is the product that gives most income and profit to this big-ass brand.

Why are we doing this comparison? The Smartwatch might have “flop” Rolex, but I want to prove to you that this is a short term change.

iPhone, although the regular changes to the design, functionality, variations, it’s a product that, like Rolex, faces yearly price increases.

It’s a fact that innovation and new functionalities are required and expected by buyers and consumers to justify the price.

But iPhone will never face a price increase so drastic as Rolex, because first of all, iPhone aren't even a luxury product, maybe premium or affordable luxury, and this comes with an whole other market strategy, development and evolution methods.

Unless iPhones became a luxury product with a price increase of 80%, iPhones or even Smartwatches can’t be up to the task regarding this futile comparisons.

First year of production for Apple is always the year that they face the biggest profits and venues, and then what? They live and survive by releasing regular product re-designs..

Apple products don't maintain value. As simple as that.

It’s a short term market climb by Apple as you can now understand.

CAN WE COMPARE THIS IMPORTANT MOMENT IN TIME WITH THE QUARTZ CRISIS?

No, I actually think that this whole smartwatch enthusiasm is not only going to get people interested on buying a “gadget” very similar to a watch, but it will also introduce new public to watches.

I see the smartwatch as a chance to better educate youngsters about horology.

How can this lead to a better appreciation of Swiss made watches and high horology?

People are made of patterns, as humans we are “coded” to always want more.

It’s natural, people prefer what it's hard to obtain or even what they can’t obtain/have.

And a Rolex is way harder to obtain than an Iphone, lets be honest..

To prove this fact, and our urge to go after the unattainable, here´s a case study from George Levenstein, an American educator who studies the link between economics and psychology, also known for his “Information Gap Theory”.

WATCHING OUR BRAINS

According to Lovenstein, something significant happens when we feel a gap between what we know and what we want to know: curiosity happens.

Leading humans to feel that we actually need to take action to bridge this gap.

Levels of dopamine are also an influential aspect to this situation, your dopamine levels will continue to rise the longer you must wait to fulfill your desire.

This ends up proving that you having to hold up for something is way more rewarding.

Do we have to hold up to buy Iphones? No..(And don’t tell we do because there’s several ways to buy an Iphone)

It's a desirable product? sure, in the short term.

This proves my opinion regarding the price increase and why bigger prices ultimately lead to bigger consumer appreciation and desire.

This means that the huge price gap between this gadgets and watches will always be a big differential aspect.

So, to end this part of the article, follow my logic.

A person buys a smartwatch, then, most likely, after some user experience with this smartwatch people will start looking for the next level of that product that again, most likely, looks similar to watch.

This will result on a search for what we can’t have, can you tell me what the next step is?

Because I don’t see luxurious smartwatches with PVP of thousands of dollars..

Instead, they will start looking at the “real deal”, a mechanical watch, with a luxurious price, brand, tradition, history and craftsmanship.

A product that ultimately and more closely that smartwatches justify the price due to the aspect, feel and acknowledgement about what it's made.

THE CONCLUSION

At short term we will definitely be seeing a increase on Apple’s income.

But at long term the Swiss watch market will keep his steady climb (if things are done right), because smartwatches are dispensable, Haute Horology is not.

Do you have a different opinion? Share it!

Hope you enjoyed the article.

Sincerely yours,

Diogo

#smartwatch #rolex #swissmade