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Luxurious

Apple’s new watches are priced in a pattern unlike any of the previous pricing models for Apple products.

Previous pricing models for iPhone, iPad, Mac and iPod were typically structured around storage differences. The higher the storage, the higher the price. The Mac had a slight variation where processor and graphics offered some additional configuration options. To illustrate, the graph below shows typical price bands for the iPhone (2011 and 2012)

Screen Shot 2015-03-30 at 11.51.16 AMIn contrast, the watches are differentiated by size, materials and bands. There are also a total of 38 watch configurations available at launch (SKUs) and another 38 bands that can be purchased separately.

The bands come in four price points and the watches in 15. Of these 15 watch prices, four are dramatically different. The pricing of the watches is shown in the two graphs below (with and without the Edition).

Screen Shot 2015-03-30 at 12.03.19 PM

This mix of product makes average pricing estimation more challenging, but the more pertinent question is what does this new pricing model signify? Is it something that Apple can “pull off”? Can Apple actually price not on functionality (or options thereon) but on materials?

It used to be said that Apple’s profit engine was fueled by the ability to price memory at a significant mark-up on its cost. The iPod earned the vast bulk of music player profits by offering additional memory increments at significant price increments. Even today, a 64GB iPod Touch is priced $100 higher than a 16GB version. Sounds reasonable, but a quick check shows that 64GB of Flash memory probably costs about $5. This exploitation of pricing/cost differences at the margin allows for great profitability and is rooted in the ways the buyers contemplate value.

Therefore the difference between memory-based pricing and materials-based pricing is only in the choice of how to attach value in the mind of the buyer. In one case it’s having the option on storage, in the other it’s having the option, perhaps, of more durability, quality or glamour.

The tricky part is understanding just how much the market will bear. What is the right differential for pricing of steel vs. aluminum? Or what makes gold worth so much more?

The cost of these materials (and the processes needed to manufacture them) is not very important. As with memories, the differences are not that significant. It could even be that the Aluminum process is more expensive than the steel process–it depends also on volume.

What matters most is how to gauge the perception of value.

This is where one can take cues from the existing market. Gold is costlier than steel but the pricing difference is greater still. Multiplying $1000 (cost) by 10 (to get a price) yields far more profit than multiplying $1 by 20. This perception of gold as being worth it is far beyond its utility–a perception which has taken centuries to build. What Apple is doing with Watch pricing is simply leveraging existing perceptions of value for materials and using them to capture profits for an otherwise purely functional product.

But that process of using perception to gain pricing advantage for function is how Prestige branding has always worked. The notion that materials, craftsmanship and attention to detail can be priced at huge multiples of cost is possible only with the right brand. That brand, itself built over decades, even generations, gives assurance of quality, perhaps exclusivity and comforts the purchaser in the moment of decision. It also provides assurance after the purchase and preserves the feeling of value well into the future. So-called Luxury brands are those which can impart these qualities on their products and extract the pricing advantage.

Sounds great, so why doesn’t everybody do it? The answer is that it takes time and perseverance, with typically low volumes. This is not something technology brands have been able to do. Mainly because the products are perishable but also because they have not been around for long. With technology, the value is high at purchase on a functional basis but diminishes rapidly afterwards. It’s as if, in order to preserve notional brand value, a product needs to be a functional commodity, undifferentiated on what it does but differentiated on the way it does it.

This is the unique value of Apple’s brand: among technological brands it can stretch to cover the perception of value for design, materials, craftsmanship and prestige. At the same time it offers new experiences and introduces new products for new jobs to be done.

  • John R. Moran

    A great piece. The Watch (and Edition in particular) represents a significant break from the past in terms of what Apple’s brand is being asked to do.

    I am unsure that any company in tech, or possibly anywhere, has accomplished this feat of brand-building – not just the extension to luxury, but the ability to achieve this simultaneously with going ever deeper into (what has been thought to be) entirely opposite markets like enterprise solutions. (Which is not to say that Apple won’t do it.)

    More on this here:
    http://www.lek.com/sites/default/files/LEK_1701_AppleWatch_Web_2.pdf

  • Christian Peel

    Apple is using the Edition to place a tax on the wealthy. It’s a tax that many will willingly pay, and even brag about.

    I’m a fan of progressive taxes and think the Apple Watch progressive tax is especially well constructed 🙂

    • Robert Frank

      Good point! For a more detailed development of it, see

      http://www.vox.com/2015/3/11/8190093/apple-watch-gold

      • Christian Peel

        That’s a great article! I am not so confident as you are that “It wouldn’t have made sense for the company to have invested so heavily
        in this project if it had been required to sell every unit at the
        entry-level price.” I believe that Apple may have done very well without the Edition, even so it does make sense to include it and to capture the profit from the high end.

      • Robert Frank

        Apple’s ability to command a high premium for the Edition stems from its best-in-category status. Even those who buy gold watches just to show off wouldn’t want to identify
        themselves to others as undiscerning buyers by purchasing a clearly inferior $10,000 Samsung gold watch. So the fact that Edition buyers are willing to pay enormous premiums definitely made it worth Apple’s while to invest more heavily in the watch project. But you’re of course correct that the company could have brought a high quality smart watch to market even without the lure of lofty Edition margins.

    • David Leppik

      This reminds me of another interesting point… uncovering bugs.

      High-end, low-volume (“enterprise”) software tends to be buggier than high-volume software, because if you are using popular software there’s a better chance that someone with a similar configuration has uncovered the problem first—and the developer has had a chance to fix it. With low-volume software, there’s a good chance you’re the first one to have ever run into a particular bug.

      Because high reliability is often a selling point of enterprise software, those companies long ago learned to give away the most technically challenging software, and charge for support, services, and carefully chosen extra features. For example, Oracle (previously Sun) gives away Java, but charges for extra support. JetBrains sells a software development tool (IntelliJ IDEA) for up to $500, but you can get most of the features for free. I mostly use the free version, and in return I’m quick to file well-researched bug reports. They have an incentive to fix my bugs quickly, before someone paying more complains.

      With Apple Watch, which is full of software—and therefore full of features that can interact with each other to introduce bugs—even Apple can’t discover all the bugs before releasing it. By selling essentially the same watch for $350 that they do for $1500, they can provide a level of feature reliability that they couldn’t do if they just sold gold watches.

      • neutrino23

        “By selling essentially the same watch for $350 that they do for $1500”

        This idea pops up from time to time. People want to emphasize that the Edition and Sport watches are the same. I don’t think they are. Yes, the internal computers are the same, but the devices serve different purposes. Just as a Rolex and a Casio both tell time they also serve other purposes. The Rolex is an icon of wealth and strokes the ego in various ways that the Casio does not. Yes, the Sport and Edition watches have the same computers but the other differences are very important to their uses.

      • David Leppik

        I was speaking strictly from an engineering perspective, in particular about feature reliability.

        Even something as simple as a smart watch probably has 100,000 testable features, which interact with each other to yield up to 100,000 factorial combinations where features interacting could produce errors. In practice, only a small number of these combinations are valid and worth testing, and most of them are core operating system features that are already part of the kernel also shared by iOS and MacOS. But you still have lots and lots of test cases—and even more cases that you can’t test in the lab. (Do they test leap seconds at the North pole? What time zone is that anyway?)

        “Make you feel like a million bucks” may be an important feature—indeed a $10,000 feature—but from an engineering perspective, it’s hard to test. And technically, it’s a placebo effect—the watch doesn’t have to be made out of real gold, you just have to think it is.

    • rational2

      And the wealthy will turn around and extract n times more of that “tax” from the rest of society.

    • Walt French

      Heh, being wealthy is a tough job, but apparently our society really needs these icons for our identity, and so a steady stream of civic-minded volunteers steps into the meat grinder each year.

      Keep being seen at the best places. Wear the clothes that your followers wish they could. Keep your hair, skin, lips and nails with just the right amount of finesse, je ne sais quoi, attitude… whew, tiring to just enumerate all the work for your assistants.

      And, of course, be seen with just the right jewelry. Maybe the boardroom types settle for $10K suits and old-school $5K watches, but the really mass-market types, as well as the newly-powerful in China or other perhaps-less-diverse pockets of wealth, other clothing, plus an Apple Watch is your best way of signaling who you want to be seen as.

      It’s not so much of a tax on the wealthy as it is a necessary expense, probably a pretty good value to see-and-be-seen people.

      Meanwhile, *YOU* can buy a very similar model for maybe a few days’ worth of paycheck, helpfully pre-selected for you by these high-maintenance types.

      • Christian Peel

        “….finesse, je ne sais quoi, attitude… whew, tiring to just enumerate all the work for your assistants.” Love it!!!

        I’m all for the Apple Watch Edition as a signal of one’s civic-minded willingness to step into the meat grinder. It appears from your calculations below (and those of Robert Frank) that Apple will make a higher margin on the Edition than on the other models, thus making the Sport and Watch more affordable; Apple is thus ameliorating the impact of income inequality. …at least a tiny bit…

  • http://twitter.com/matthewwanderer Matthew

    “Sounds great, so why doesn’t everybody do it?”

    This is a great piece of analysis, HD. The last paragraph sums up Apple’s formula well.

    IMHO, Apple’s intentional build quality might play the most significant role in the various perceptions of the Apple Watch, and ultimately why it will be embraced.

    Photos of the interior of the MacBook Pro, etc, immediately come to mind. Apple ticks the craftsmanship box, which is unusual in this space.

    • handleym

      The value I get from the device comes from

      – functionality (equal across all three models)

      – MY delight at the materials

      – the respect or lust or whatever that OTHER’S accord me

      The third one is a consensually manufactured reality — I can’t create it by myself. If I wear a $100,000 watch that’s made a brand that’s so exclusive no-one has ever heard of it, and is so expensive because it contains moon rocks (inside the watch, the casing looks like a Timex) I don’t get that respect+lust.

      So it boils down to how easily can a company create that consensually manufactured reality? Like Horace said, it takes time.
      Of more interest, to me, is that I suspect in tech it’s going to be a more difficult reality to maintain than in standard luxury goods. The usual annual anti-apple idiocies (antenna-gate, supposedly spoofing the finger-print sensor) don’t get THAT much traction when your phone/Macbook/iMac are not THAT expensive; you can shrug them off as “well, no-one else is any better”. I suspect they have the potential to gain a lot MORE traction when a device is so much more expensive. Apple may not want it, but when you buy a $17,000 item, there’s an implicit bargain that the damn thing works perfectly.

      People are not going to be happy if, after two weeks, we get a barrage of publicity about “aWatch dies after two hours because of Bluetooth bug” or “aWatch randomly disconnects from its iPhone” or whatever. The issue is not even, so much, whether the bug is problematic and irritating; its that if a social consensus arises that aWatch is a less than perfect product then a buyer who spent $17,000 on one is a sucker. The respect/lust that your watch was supposed to engender is now replaced by mockery, snickering, and pity. I can imagine some pretty withering SNL skits if there are ANY bugs in watchOS 1.0 (and there are ALWAYS bugs in the software; hell, even if the watch software team is perfect, you think the bugs have all finally been quashed in iOS 8.2, which can screw things up on its end regardless of how good the watch is…)

      A socially manufactured consensus can disappear incredibly rapidly as soon as it is shown to be non-universally agreed upon. Horace, as a Romanian, is, I imagine, even more aware of this than the rest of us of what happened so fast in 1989.

      • Childermass

        I like your use of consensuality, but you seem to be predicating it upon a fixed notion of functionality. And no doubt you are right within certain bounds. But …

        As we move from brain to heart to gonads, or reason to love to lust, doesn’t the very functionality of the item alter? Doesn’t what it is for change? When does a watch cease to be a watch at all?

        At $50,000 a watch is now part of my mating ritual isn’t it? If it doesn’t tell me the time why would I care if the kind of women who want to have babies with the kind of man who has a $50,000 watch start having my babies?

        Why does my daughter buy Louboutin shoes? To be comfortable? To keep her feet dry? What is the functionality of a shoe and what of a Louboutin shoe? Even on my innocent daughter’s foot. Hmm.

      • handleym

        If your daughter wears a mink coat to an event where mink coats are considered unacceptable, it’s not going to be fulfilling that social function is it? The coat is just as warm, it may well have cost $50,000, it may have a Gucci label [or whatever THE label is for mink coats], but none of that matters if the people around you have a certain (negative) opinion of what a mink coat means.

        That was the point if my post.
        Apple WANTS a gold aWatch to mean “successful, good taste” but there is a very real possibility if they screw up the software in a way that becomes very public knowledge (and, I’m sorry, but they have been doing a pretty lousy job with software over the past two years or so in terms of constant minor bugs), that the social message of gold aWatch will become “nouveau riche sucker with more money than sense”.

        OF course these things are socially constructed. If I wear $50,000 in diamonds in a watch, that says one thing. In a ring, it says something slightly different. In earrings (as a man) it says something different again. As a pinkie ring, it says yet a fourth different thing. Same diamonds, same cost — but society interprets differently, and I don’t get to choose that social interpretation.

      • Childermass

        Why would she take her mink where it didn’t work? She’s no fool.

        If you don’t take part in the choosing of that social interpretation then you are playing at the wrong table. We all choose, all of the time.

        I’m not sure logic works here. Let your – er – endocrines swing.

      • http://twitter.com/matthewwanderer Matthew

        “socially manufactured consensus can disappear incredibly rapidly as soon as it is shown to be non-universally agreed upon.”

        Agreed. Given the context and the price points, the stakes are unusually high for Apple with this product.

  • http://www.isophist.com/ Emilio Orione

    To build the impression of exclusivity of a brand, its products shall be high priced.

    Apple has built an image for its brand of affordable luxury by selling at price higher than their competitors but in absolute termo not exclusive.
    I mean that everyone can afford the price of an iPod a Mac or an iPhone if he really wants to, but at the same time he is paying more giving value to build quality, design, support, experience and easy of use (model of mac cost less than similar competitors but always dealing with high end products, the price is always much more than average market price for their segment).
    Without the edition the watch price seem positioned with the same image of affordable luxury, but the edition is different, it is exclusive luxury.

    They are increasing the brand image, alway luxury but both affordable and exclusive. This has been done by a lot of luxury brands that have traditional products with exclusive price and affordable products with the same brand for the masses.
    So the same brand for an high price dress goes in affordable perfume or belt.
    Usually they first build the luxury brand and than use it in lower price lines, Apple is doing it the other way around, this could be huge.

    • Mark

      >> Apple products have had until now all the aspects of a luxury product but the exclusive price, Vertu phones are exlusive not Apple’s.

      — All the aspects of a luxury product but the exclusive price? If it isn’t exclusive, only better, we call that a better product. Better products aren’t luxury products for they’re superiority. Apple can credibly enter the luxury market for the first time with the higher priced watches because they’ve protected their brand in terms of quality. But luxury is a new thing for them.

      • http://www.isophist.com/ Emilio Orione

        I think of luxury as attention to details or quality in every aspect of the product, from packaging to retail shop, as luxury products do.
        For instance every apple’s product comes in a luxury package and they are sold in great design stores.
        Take Apple’s router. There are better routers on the market, at least more configurable routers which is a plus for this type of product, but every competitor’s product comes in cheap carton ugly boxes and is sold in discount shops.
        It is not only a matter of better, it is the look of the product that speaks about luxury. A better product recognized for its betterness does not need fancy packaging, it is better whatever way you sell it. A luxury product can not be taken apart from the sale experience, from packaging to shop to salesman everything must speak about luxury, and Apple does it all but the price until today.
        Apple Watch Edition is a new territory in which apple enters from a different side with respect to other luxury brands.

  • jameskatt

    The fact is: Apple Watch Edition uses real gold, not just gold plate. This enormously increases the cost of the watch casing itself. The watch casing itself should easily cost $3000 in gold. Add the gold in the watchbands, cost of the other materials to create, then the $10,000 starting price may represent just a little over 50% profit margin. The price also was raised past $10,000 to get the feeling of exclusivity that affluent buyers want. Compared to $36,000 and up Rolex Gold Watches, the Apple Watch Edition is being sold at a substantial discount and a much lower markup.

    • http://www.asymco.com Horace Dediu

      As an exercise, calculate the actual cost of gold in an Apple Watch Edition. All the data is publicly available. Some data points:
      • The 42mm Apple Watch Edition Yellow Gold case weighs 69g
      • The 38mm 18-carat rose gold with bright red Modern Buckle 96g (this is priced at $17000)

      • Walt French

        Here’s this reader’s exercise. First, get more info from iMore dot com (“which apple watch should you get”). 38mm cases are 25/40/55g (Al/Fe/Au) and 42mm cases are 30/50/69g.

        Aluminum is about 2.7g/cm³, stainless 8 and gold 16. Apple helpfully notes their aluminum case is ⅓ the weight of stainless, validating the first two points’ relevance. But the gold is 18K—only ¾ gold by weight—so using Cu’s 9g/cm³ for the other, the alloy is about 16g/cm³.

        Assuming very similar sized cases for the three materials, regressing the weights against the densities finds the 38mm design has about 20g of non-metal display, battery & computer, while the 42mm design has about 24g of contents. This is consistent with Apple’s claim of a longer battery life despite the 42mm’s larger display. The extra battery is probably most of those 4 grams.

        Subtracting, the Au “case” has approximately 35g (38mm) and 45g (42mm) weight. Again, only three-fourths of it is gold, at $38/gram (per Siri/Alpha) so there is about $1000 of 24K gold in the 38mm model and $1300 in the 42mm model. Other precious metals are often alloyed with gold, but they shouldn’t change the math by much.

        From the videos, there is a LOT of expensive machining and processing involved in all three lines’ case material. But the gross margin for just the gold is approximately 90% of the $10,000 premium on the selling price.

      • Sacto_Joe

        This is a new alloy, and there is the markup for a special alloy, period. That would double the price right there. Then there are the specialty jigs and fixtures, the extra processes to make sure all scrap down to the smallest mote is recovered and accounted for, the special security handling, the hand-crafting, ectera. Finally, there are the R&D costs to absorb.
        Why is everyone surprised by the high cost?

      • Walt French

        Who is this “everyone” you speak of?

      • Sacto_Joe

        “Who is this “everyone” you speak of?”
        Present company on Asymco excepted. Sorry, Walt, I thought that was understood.
        “Seems unlikely there’d be enough Edition sales to directly cover the huge amount of energy it took to set up for it.”
        I think that last is an EXCELLENT point! And one I’m not seeing anywhere in print.

      • Sharon Sharalike

        That, and it makes the middle watch seem more reasonable by comparison. If there were no Edition they would sell fewer of the Watch and more of the Sport Watch. In addition to all its other attributes, the $10K serves as a useful “decoy” price.

      • http://sumocat.blogspot.com Sumocat

        The $10k price includes the sports band, which features a gold pin, so the margin is slightly lower.

      • Glaurung-Quena

        “so the margin is slightly lower.”

        Infinitesimally so, as it’s just a couple of grams of gold. I think the big surprise about the Edition watch was that Apple did not unveil a gold link bracelet. Several apple watchers were expecting that to happen, and were expecting that the gold link bracelet would cost $10k by itself (and have 2-3 ounces of gold in it, making for a 3-4x markup over the metal). Instead, the leather band with a gold pin costs $7,000 — something like a 100x markup over the cost of that dainty little pin and a bit of leather..

        I am sure it’s *very nice* leather, from calves who died of natural causes and were hand fed organic hay by Tim Cook himself, but still, the leather band with gold pin is I think the most egregiously priced part of the watch lineup.

      • http://sumocat.blogspot.com Sumocat

        Even if the pin were just a few grams, which seems lowball, the gold content would be worth $70. Considering the markup on the watch itself, I would not expect the price of the sport band with gold pin to be inconsequentially small. Also, the modern buckle band appears to have nearly as much gold as the watch itself (Don’t overlook the connectors.), which explains the price. Only the sport band features a single pin.

      • http://www.asymco.com Horace Dediu

        The modern buckle does not have nearly as much gold as the watch itself.

      • http://sumocat.blogspot.com Sumocat

        The modern buckle band. The buckle appears to have no more than half the metal content of the watch casing, but the band also includes two 18k gold connectors, presumably solid. Granted, the watch body may be less hollow than its appearance implies, but from appearance is all we’re able to judge. Also, I just found the weight listing of the Apple Watch Edition with modern buckle: Case: 54g, Small Band: 40g.
        http://www.apple.com/watch/apple-watch-edition/18-karat-rose-gold-case-rose-gray-modern-buckle/
        Depending on which estimate we use for the watch internals and assuming the leather weighs 5g (based on 1g per 30mm, per difference between small and large sizes), the weight of the metal mass is pretty close.

      • http://sumocat.blogspot.com Sumocat

        Hold on, I just noticed something odd about the band weights: the gold pin sport band is 9 grams lighter than the steel pin sport band.
        https://www.apple.com/watch/apple-watch-edition/18-karat-yellow-gold-case-black-sport-band/
        http://www.apple.com/watch/apple-watch-sport/silver-aluminum-case-white-sport-band/

        From appearances, they are the same size, so logically the gold should be heavier, but it’s not. This implies Apple is using gold ceramic for the pin. This does not apply to the buckles as gold buckles heftily outweigh their steel counterparts.

        In light of this new evidence, I withdraw my previous comment about the sport band.

      • GlennC777

        I suppose the appropriate perspective is that it’s not the band that costs $7k, it’s the exclusivity of owning it that does.

        My only real discomfort with the Apple Watch is that with its Edition models, Apple has chosen to appeal to some of the less noble of human motivations and desires. Your Dante quote was interesting, because it puts it so well: “pride in superiority, status, power.” The idea of paying for something so clearly designed primarily to display one’s superiority, status, and power (wealth being a surrogate for all three) is culturally distasteful to me.

        I resolve my discomfort by recognizing that those motivations, and the market for such products, exist whether or not Apple chooses to target it, and I would rather some of that wealth flow towards Apple than not.

        Stil, that discomfort is out there. It’s clear a lot of people feel it, and the reaction is criticism of Apple. I think Apple is only the messenger here, so to speak, and that criticism is misplaced.

      • Glaurung-Quena

        “so using Cu’s 9g/cm³ for the other ¼, the alloy is about 16g/cm³”

        That’s about right, but FYI, standard 18k gold is 12.5% copper and 12.5% silver. Density ranges for 18k gold can be found here.

      • Walt French

        Thank you. I didn’t go back to the video that listed the other metals because I thought the details would not help answer Horace’s original question. I frankly don’t know how the density of a Gold/Silver/xx/xx alloy would vary from its constituents’ densities, so left it at a first SWAG.

        I could have stopped at the assumption that the weight of the case+computer stuff was ALL gold, all 55/69grams, and still have made the point that the gold content is WELL below the retail price.

      • Rocket_man

        Confirmation of Walt’s response (he beat me to it!):
        Apple Watch Edition Yellow Gold contains ~26.5g of 24K gold for the 38mm case, worth ~$1008; the 42mm case contains ~34.9g of 24K gold, worth ~$1325. Note this does not include the band.

        These are determined making the following assumptions:

        1. Volume of metal in each case (within a given case size) is constant (i.e. equal volume of Aluminum vs Stainless vs 18K gold).

        2. Thickness of cover glass is ~1.6mm (based on scaled hi-res photos). Calculation is relatively insensitive to this for ±0.2mm

        3. Known densities of ion glass, sapphire, 7000 series Aluminum 316L stainless, 24K gold.

        4. Weight of internal components (CPU, power, sensors) is equal within watches of each size. These turn out to be ~13.8g for 38mm, 15.4g for 42mm cases.

        Additional interesting result: the Gold Edition definitely contains lightweight (ceramic) “alloying” constituents. This is clear because the weight difference between Stainless and Gold is too small to be standard 18K gold density. I calculate the weight fraction of ceramic to be on the order of 2-4% to allow this. The hardening effect of this constituent has been advertised by Apple, however it also provides the profit-margin benefit of displacing ~$100 to $150 worth of gold, depending on case size.

        (thanks to Rob Griffiths, http://robservatory.com, for his compilation of watch dimensions and weights).

      • Walt French

        The “Gold” video shows a pressure process that is not inconsistent with ceramic in the mix. However, the Apple patent is about sintering gold/ceramic powders in a dissimilar process.

        I’d think the small unexplained weight could be explained by the unknown metal alloys and/or the ultra-high pressure process that increases the metal’s density.

        As with my post below, data that fine-tunes from my assumptions would be welcome. Even though, since I’m not really all that interested in metallurgy, it matters a whole lot for my purposes.

      • Rocket_man

        The uniqueness of their process is that they are joining a lightweight and hard material (ceramic) to gold such that it can provide enhanced hardness and reduced weight while allowing the needed forming processes with minimal machining due to the “near net” forming provided by sintering. The high pressure required removes voids between the constituent particles but the metals themselves cannot be compressed to increase their density (unless your facility was at the center of the sun). The overall 18k gold is actually less dense than normal due to the lightness of the ceramic. The only metal of suitable low density that is sometimes used as an alloying element with gold: aluminum, would produce “purple” gold.

      • Walt French

        Again, a bit more directly this time:

        ①the “Gold” video shows a process that is different from Apple’s recently-patented ceramic process.
        ②That ceramic patent is, in turn, not a whole lot different from a Hublot gold/ceramic patent that Hublot explicitly states is not for re-licensing and so is lawsuit bait.
        ③Apple has NOT said that their gold case uses ceramics. Instead, they describe a mix of other metals. You might imagine they’d be happy to promote their ceramic mixture if it was a significant part of the hardness.
        ④The patent describes a very much lighter alloy (thanks to ceramics’ much lower density and a MUCH higher percentage than 2%–4%). But by my “exercise” below, the weight of the Edition case is reasonably consistent with relatively ordinary gold alloys.

        I laid out all my math in a way that people can check and replicate, putting their own confidence assessments on the weights. Despite your offering other bullet points, I don’t see how you could have performed calculations precise enough—we don’t know that the gold cases are dimensionally identical to the other metals’, for example, and I had ±1g magnitude uncertainties AFTER making a boatload of assumptions.

        A gold/ceramic alloy would be neat, I guess, but I don’t see that we have reasonable EVIDENCE, let alone PROOF, of any ceramic in the gold case.

      • http://sumocat.blogspot.com Sumocat

        Agreed. I pointed out the lightweight portion of the patent to everyone, and I have also seen no evidence that its process was applied to the current Apple Watch. I believe the weight discrepancy is due to an inaccuracy in one or more of the assumed variables (volumes, densities, internals).

      • peter

        I Think your assumption #1 is off the mark. Jean-Louis Gassee links to Greg Koenig (see link below), who shows under “Some Final Notes” a few pictures of the inside of the case that show a difference between the gold and other versions. That, rather than ceramics, probably explains your 2-4% difference.

        http://atomicdelights.com/blog/a-glimpse-at-how-the-apple-watch-is-made

      • Childermass

        Neat response. You could just save time and say: the price we pay is not measured in the price of gold and diamonds but in the value we place on our ego. Or insecurities. If we ever got round to thinking about it.

        Why else do we buy Bentleys and Breguets and Yachts and Yankees Suites?

        Maybe we could save a lot of time by having the tech bloggers (and the folks that post on their sites) visit Dubai, or Nice, or Punta del Este. Or even the Upper East Side. There is another world out there. (Maybe I should say the REAL world). And it doesn’t give one single shit about specs or ratios or reason.

      • http://sumocat.blogspot.com Sumocat

        Using the weights I found for the modern buckle bands (link in comment below), I estimate the 38mm 18k rose gold Apple Watch Edition with modern buckle has 46.5g of gold, 25.5 in the watch, 21 in the band (counting buckle and connectors). Margin of error in the total is +/- 2g. At today’s price of $1323 per ounce (per Google), that’s $2,170.

        I started by estimating the weight of the leather in the modern buckle band based on the difference between large and small band. I subtracted that estimate from the weights of the gold buckle band and steel buckle band and compared to find the weight ratio of gold to steel. I applied this ratio to the watch case weights, adjusting the subtracted constant for the weight of the internals until I matched the ratio value. I added the resulting weight of the case to the band and multiplied by 0.75 to determine gold mass.

        I found that rounding to 6g for the leather resulted in a nice even ratio of 0.5. As all Apple’s given masses seem to be rounded anyway, I went with that (there’s no point in trying to be more precise than the given data allows). The mass of the Apple Watch internals was estimated to be 26g. Unfortunately, I was unable to check the math against the classic buckle band as no weight is given for it, but this calculation gives the 42mm 18k yellow gold watch a gold mass of 32.25g. No assumptions were made.

        (P.S. RE: my earlier comments about the modern buckle band, I know 21 is not “nearly as much” as 25.5, but it’s more than 80% and the band adds 70% to the price, so it’s justified.)

  • http://sumocat.blogspot.com Sumocat

    Arguably, Apple played in materials-based pricing with the iPhone 5c, which reclad the iPhone 5 in plastic but bumped up the battery and front camera spec slightly to maintain parity with where the outgoing iPhone 5 would have been priced. Also, Apple made a significant material shift from plastic to glass and steel with the iPhone 4. This shift put it ahead of competitors for years.

    That latter point leads me to believe Apple will continue to use materials as a differentiator. HTC and Samsung have both caught up with Apple on aluminum and glass. The next logical step for Apple would be steel and sapphire, which seems quite likely given Apple’s big play for sapphire in failed GT Advanced deal. The Apple Watch could be key in ramping up production for both.

  • dr.no

    Swiss sold 22 billion CHF in 2014 of which only 2% in unit were precious
    metals and 4% gold-steel.

    Apple is not trying to make Gold a commodity.
    Apple has to sell to high end retailers.
    Gold was bought by Central Banks for Inflation. There is limited supply because of it.
    Apple is not trying to compete on price.
    Apple should only sell it to people with American Express Black card it should
    deter smuggling.
    It would be funny if winner of iTunes give-away buys the watch using 10,000 gift card.

  • berult

    The peculiar gold-hardening steps within the meticulous craftsmanship of the whole manufacturing process, with such Apple-like tolerance, makes it an outlier in the precious-metal, mass-production industry.

    A ‘gold-bullion-plus’ cost structure must reflect tolerance in both structure and design, an endogenous tolerance which is itself being dictated by the exogenous tolerance of mindshare abstraction. For the Apple Brand…that is the market reality.

    The actual cost of the Apple Watch Edition is Brand-abstracted. Apple builds a new category of products within Brand-tolerance. An 18 karats gold Apple object carries along a real cost structure that is brought about, not through design->purchases->process, but rather by the rigorous, albeit metaphysical demands of the Brand’s evolving canon.

    Apple builds the Apple Watch category, as though abstracted whole…cost, use-cases and price-spread…from the Brand’s wrist. No matter which Apple Watch one may wear, a Brand’s wrist is how much it cost, …and a Brand’s twist is how much one paid. berult.

    • Sacto_Joe

      For Jony Ive, form is function’s inseparable shadow. He dressed beauty in gold for aesthetic reasons. And from all I’ve heard, she’s gorgeous.

    • Bud777

      “an endogenous tolerance which is itself being dictated by the exogenous tolerance of mindshare abstraction”…I have no idea what this means, but I really like the way it sounds 🙂

      • freediverx

        This sounded like someone at Google trying and failing to sound like Jony Ive.

  • robdk

    Apple has clearly decided that technology is going more mobile, and that in that direction, Apple has a very good chance at capturing large portions of the profits in the sectors it moves into. As Horace has discussed many times on his podcast, personal technology solutions, because of their close contact and continuous use, allow for greater perceived value for customers, and greater pricing power and margins for Apple. Apple owns the whole stack, and that means they can roll out ApplePay, HealthKit etc relatively easy with good chances of success.

    Apple has always catered for the top 20-30% of the markets it operates in, and finance and health are lucrative markets for these users.

    The problem with the watch market is that the top of the market consists of the Swiss luxury brands, where many buyers will refuse to buy/wear a product that is cheap, ie under 10-20k USD. The price is the status.

    If Apple wants ApplePay to grow in use in the top 1-2% of the market, then they have no option other than to do the Edition watches, since these customers are not gonna look at a steel or aluminium watch at under 1000USD.

    If Apple wants the worlds shakers and movers to use Apple’s most personal technology yet, then they have no option than to provide products to this market.

    And ironically, Apple is the only tech company that can do this. Do we really think Samsung will do a gold AndroidWear watch to 15k USSD?!!

    • Corbin Supak

      I’d be shocked if Samsung did not, honestly. There’s plenty of rich people with poor taste. I’d expect it to be bigger and heavier. And they should beat Apple on price – meaning, slightly higher. I’ll expect to see one on stage at GOP primary debates next year, perhaps inadvertently beeping.

      • Sacto_Joe

        Yes, others will make them. But they won’t sell.
        Caveat: They might sell if they’re an Apple Edition knockoff.

      • freediverx

        As in “gold-plated” or “gold-toned”.

      • freediverx

        The problem with the idea of Samsung competing with Apple’s Edition watch is that they’ve never successfully cultivated a premium brand.

        While their Galaxy line of phones could be said to occupy the same high end segment of the market as the iPhone, Samsung have always tried to position it as a better value by offering similar or seemingly better ‘specs’ at slightly lower prices. The perception of their brand, at best, has been that of a ‘fast follower’ who can quickly mimic Apple’s innovations and offer them for less money,

        I believe the data shows that Android in general, and Samsung in particular, have lower penetration with higher income customers. If they tried to market a solid gold watch I think they would be ridiculed or completely ignored by anyone who could afford to buy them.

      • Walt French

        Can we get a betting pool going? I’ll wager that the Samsung exec who pushed the idea would find himself transferred to VP/Service&Support, Tanzania, if the idea didn’t pan out after all the startup expenses.

        Not that it can’t succeed, (tho it can’t), but because the payout to doing it isn’t enough higher than the expenses to PR, advertising, etc.

        They’d do much better to create a very stylish, base-metal case and sell it for 10% of the Edition’s price. Position it for the Nouveau Not-Yet-Riche up-and-comers.

        I think I get Apple’s scheme here, and it’s a great one. But a smart competitor can compete on merits in the stainless price range.

      • Corbin Supak

        Samsung has followed Apple completely, spending as much as necessary to scrape out a sliver of the sector’s profits (and all others failed to do that). They are Asian, and should appreciate the market for conspicuous consumption in China, which is the epicenter of this market, correct? I haven’t seen Samsung’s brand positioning as ‘practical alternative’, but ‘more ports’ and ‘more screen size’. I’d expect ‘more rose gold’ too. I just can’t see Samsung leaving any crumb on the table, or risk losing the high-end customers they currently have.

        Maybe they partner with a watchmaker for a bit of brand halo, and those guys will need to sustain their business of selling precious metal. Tag Heuer sells steel at $15k, and are slaving away on an Android model as we speak. Is it going to be less than steel? Is it going to be utilitarian, not fashionable? Is it going to be steel, fashionable, and half the price of their other watches? I’d say no, no, and no.

        And Samsung may partner with someone, but would eventually swallow them whole. The platform is primary. If the connected watch turns out to be what Apple thinks it will be, then the payout here may be existential.

      • Walt French

        I think I agree with this recent note of yours, but still can’t see Samsung taking the chance of a 5-digit price tag on a Samsung-branded “watch.”

        And I also believe that if people ask, “WTF are you thinking???” they might not be smart enough to say, “we think it’s an excellent item for a certain clientele,” and instead say, “we wanted to price it for quality relative to a certain other manufacturer,” for which they would earn widespread ridicule for trying to one-up Apple ① in the worst possible way, and ② demonstrating how little they understand the market they purportedly would be serving.

        You’d think there’s room for multiple luxury brands of smart watches. I just don’t see Samsung having laid the groundwork for offering one. Frankly, their management has more pressing concerns.

      • Space Gorilla

        There may be no other tech company that can address the luxury/premium segment. This segment desires ‘whole solutions’, the kind of vertical integration Apple offers (and the rest of the industry has mocked for decades) may mean Apple is the only company that can serve this segment. A curated experience may be table stakes to play in this segment.

  • El Aura

    Other ‘functional’ watches are also offered in different materials at premium prices. Suunto charges a $100 premium for a SS case and sapphire cover ‘glass’ for its sport watches.

  • kathy anderson

    In Canto V of Dante’s Inferno, in the second circle which is close to the bottom of Hell, Virgil points to the ancient Egyptian Queen Semiramis as an example of the brokenness of luxury and extravagance.

    Happily for the greater good of the world, Apple does not confuse the foul lust of broken luxury (which is pride in superiority, status and power) with the enduring value of beauty and the human imagination.

    Many people also understand (Apple customers foremost among them) that expensive objects of enduring value can actually be more economical to own over time … their cheaper comparable substitutes have not usually been built to last.

    Perhaps the value of time will play an even greater role in Apple’s unique story for the gold Edition …. in other words, rather than premium pricing for gold Edition hardware updates, perhaps there’ll be no additional cost for the updates at all, making owning the gold Edition cost little more than the equivalent of multiple stainless steel versions.

    • freediverx

      “rather than premium pricing for gold Edition hardware updates, perhaps there’ll be no additional cost for the updates at all, making owning the gold Edition cost little more than the equivalent of multiple stainless steel versions.”

      I’m skeptical that Apple Watch owners (Edition or otherwise) will be given the option to upgrade the guts of their devices, let alone that some of them will receive this benefit at no added cost.

      There’s been neither a need nor a precedent for hardware upgradeability in Apple products for several years. Even in their desktop and laptop product lines, where upgradeability was historically a given, the trend has been towards increasingly sealed products that make it difficult or impossible to replace components such as CPUs, RAM, and storage. Apple’s customers have accepted this tradeoff in exchange for increasingly slim and light products with better battery life and seamless designs.

      The only reason this topic has emerged in discussions of the Apple Watch is the seemingly ludicrous price of the Edition models.

      After the initial sticker shock, many are now trying to rationalize their stratospheric prices and margins in various ways, including guesses about how they may provide enduring value. But these attempts at rationalization repeatedly ignore the fact that the Edition is aimed at an entirely different type of consumer, whose purchase decisions are driven by very different factors, and for whom the term “value” has a very different connotation.

      This customer will not be more inclined to buy the Watch if it’s priced more affordably – in fact they will be less interested the more affordable it is. They will not need to be consoled with promises of long term utility, upgradeability, or resale value because for them the expenditure will be as trivial as that of a pair of designer jeans might be for a middle class consumer.

      • katherine anderson

        The big story here, I believe, is that Luxury as we’ve come to know it (which is largely a broken luxury) is being disrupted … and Apple is leading the way.

        Who is this entirely different type of Apple consumer you refer to? Presumably you mean well-to-do status seekers who, as you say, will be less inclined by buy the Edition model if it was more affordable.

        I think your point affirms my observation about broken luxury, but at the same time I wonder if it doesn’t assume too much … Of all the wealthy people I have ever known, each has acquired their wealth precisely because they have been exceedingly careful about all their purchase decisions, both in business and personal life.

      • Mark

        >> … expensive objects of enduring value can actually be more economical to own over time … their cheaper comparable substitutes have not usually been built to last.
        I think this is a myth. I think the owner may have an attachment to a luxury item because it is luxury items and he/she has a personal history with it he wants to maintain. But in those case the value he’s maintaining was provided by the luxury aspect of it to begin with. The luxury as exclusivity may endure, or it may not. It depends on the social value and value to the owner.

        If you really look at luxury machines the quality just isn’t there. No knowledgable person actually thinks a Porsche is a better car than a corolla, nor that they last longer. Ditto a Cayenne to a Tahoe. They are notorious and unreliable money pits. The cheaper mass market machines are better and last longer. Mechanical watches don’t work better than cheap electronic ones, etc. Clothes are another matter, but that is a different subject.

        The beauty of an Apple gold watch is that it actually does work as well any other Apple watch, and so you know exactly what you’re paying for the luxury. The costs aren’t hidden. It may seem strange to think the same functionality is a plus, but the myth of luxury machines as better (when they are in fact worse) makes this a new thing in a better way. Luxury car makers don’t promise better function (except perhaps the speed of a luxury sport car) or durability, and the honest ones will tell you not to get one for those reasons. Get it for the exclusivity, and pay the rest of your time owning it in worse function, less durability, and higher maintenance if you want to keep it.

        I thought at first Apple would have some trade-in program too, but now I don’t think so. You know exactly what extra you’re paying for the gold watch and what the extra money does for you. No one is deceived in the least. And I’d be surprised if a cottage industry among gold refiners doesn’t spring up to separate the 75% gold in the watch (I think that is what 18K means) from the rest of the metal so you’ll know exactly what you can get for it when it becomes totally obsolete. When it is only n-1 obsolete it would have a discount price for some people.

      • Walt French

        There may be an industry for putting new chips inside an existing case—sort of like putting a monster engine in a compact car. Presumably, when Watch/2 comes out with new innards, some maybe not-too-clever reconfiguration could get a Sport’s innards into the original gold case. Or a REAL hacker could design an entire CPU board like a Raspberry, for the case. Difficult, to be sure, but not impossible.

        However, melting down a $10K case to extract maybe $1000 of gold seems the least likely disposition. *IF* the original case was valued well above the gold content, you’d think that would persist.

      • Mark

        If so, yes. I was assuming 3rd party upgrades not feasible, but I don’t know. And thought I discounted it, nothing prevents Apple from offering upgrades as they do with phones that take the sting off. It would be a vastly smaller fraction of the cost with a gold watch though.

      • neutrino23

        ” … expensive objects of enduring value can actually be more economical to own over time … their cheaper comparable substitutes have not usually been built to last.I think this is a myth. ”

        This is a complex topic. You can certainly find anecdotes to support either side of this argument.

        You pay more for well built tools in which the metal has been heat treated for strength and the active surfaces have been hardened with the infusion of expensive elements and the overall design has been thought out to provide a tool which balances nicely in your hand. Such tools are a joy to use and last a lifetime. Certainly they are worth the extra cost.

        At some point you can “gild the lily” and over do it. Whether this is useful or not is usually in the eye of the beholder (purchaser).

        My personal observation is that for most products there is a similar cost/benefit curve. The cost increases gradually with benefit then suddenly hits an inflection point where a small increase in utility greatly increases the cost.

      • katherine anderson

        … fascinated to learn what you tell us about the money pits of some “luxury” cars … I always assumed there was serious value to the luxury cars you mentioned, in spite of my being spooked by their luxury sports counterparts … the noise and swagger … (doesn’t speed kill people?) … and some of them so hideous in their design, they look like they belong in a science fiction movie rather than on a road.

        And since you mentioned it … Clothes. I can’t name for you any Luxury brands that you would recognize whose products aren’t mass-produced and copied from actual artisans … So much for all that is sold to us as Luxury, with all the qualities of fine craftsmanship and superior styling that that’s supposed to invoke …

        No wonder there’s such a problem with counterfeiting overseas … Why would manufacturers there see anything morally repugnant with counterfeiting when to them the whole business of Western Luxury is faked.

      • DesDizzy

        I think perhaps you should show more reticence in talking about products of which you clearly have no knowledge. If one buys a luxury product one is paying for artisanship and quality materials. That is why a quality turntable that I purchased in my teens works perfectly 30 years later and why my speakers costing the price of a small car will be performing to the same standard in 10 years time.

      • katherine anderson

        Please tell us more about the great Italian design houses you mention in an earlier post, e.g, Ital Design, Pininfarina

      • Mark

        Yes, luxury is being disrupted. Absolutely.

    • Anastasio Pelè

      Sorry to nitpick, but you are mistaken on Dante.
      1. The 2nd circle of Hell is the second furthest from its center and from Lucifer, i.e., not close at all. Here the sin (and its punishment) is among the lightest in Hell.
      2. The sin punished here is commonly called “lust”, in the sense of “excessive carnal desire”. Dante writes: “spiriti carnali, che la ragion sommettono al talento”, “carnal souls, who submitted their reason to whim, to desire”; “amor di nostra vita dipartille”, “love took their life”; and “noi che tignemmo il mondo di sanguigno”, “we, who colored the world sanguine”.
      3. Specifically of Semiramis, Dante writes that “libito fe’ licito in sua legge”, “she made licit, by her decree, any desire”. Note the very revealing word “libito”, from Latin (and English) “libido”, “carnal desire”.

      • katherine anderson

        I wanted to stay clear of the carnal side of it as a lone woman commenter among (mostly) men. It seems to me, Dante still makes the point about extravagant lussuria and i lussuriosi (luxury and luxurious people) being rotta (broken).

      • Mark

        He makes the point, but it isn’t necessarily true. Dante sides with the Franciscan Order over the practice of poverty, with their radical and total commitment to own nothing. Whereas Thomas Aquinas, as a Dominican, would not agree and refused to confirm the Franciscan view on poverty and it shows in the Summa. Dante was a better poet, but I gotta give the nod to Aquinas and the dominicans on views about wealth and in opposing Franciscan radicalism.

      • Mark

        Here is the reference, from Canto XI in Paradiso.

        Lest I seem obscure, speaking in this way,
        take Francis and Poverty to be those lovers.
        that in plain words, is what I meant to say.

        Their harmony and tender exultation
        gave rise in love, and awe, and tender glances
        to holy thoughts and blissful meditation.

      • http://aaplmodel.blogspot.com/ Daniel Tello

        Actually such an interpretation is anachronistic, and Anastasio’s is the only right one. Dante is not making any point related to wealth or poverty by using the word ‘lussuria’ in Canto V. Despite a common origin, that Italian word—same with Spanish ‘lujuria’—does not translate to the current connotation (since around the 17th c.) of the English word ‘luxury’ (Italian ‘lusso’ and Spanish ‘lujo’).

        Don’t take my ‘word’ for it (although I can ‘natively’ vouch for it in Spanish), here’s what the top search hit (Reverso) for an Italian translation says:

        lussuria sf lust
        lussuria non si traduce mai con la parola inglese luxury

        “lussuria is never translated with the English word luxury” according to same translator.

      • Anastasio Pelè

        Nope.
        In Dante’s view, both St. Francis and St. Dominic were great reformers, and the work of each one was needed, the first for charity and the second for knowledge.
        This is also mirrored in the chant structure. In Paradiso chant 11, St. Thomas (a Dominican) praises St. Francis and laments the decadence of the Dominican order; in Paradiso chant 12, St. Bonaventura (a Franciscan) praises St. Dominic and laments the decadence of the Franciscan order.
        In chant 11 it is explicitly said that Francis’ and Dominic’s teachings are of equal importance and equally needed, and they are not in the least incompatible or opposed. On the contrary, they are one and the same:

        “One was all seraphic ardor, the other was on Earth the splendor of a cherub’s light for his knowledge. I will speak of just one of them, because by praising any one of them I will tell of both, since the works of both had but one goal”

        “L’un fu tutto serafico in ardors
        l’altro per sapienza in terra fue
        di cherubica luce uno splendore.
        De l’un dirò, però che d’amendue
        si dice l’un pregiando, qual ch’om prende,
        perch’ad un fine fur l’opere sue.”

      • Mark

        Well if Dante isn’t making that point, it still still true that Aquinas rejected the Franciscan view of poverty (as did the Dominicans generally), and poverty isn’t required for charity. So I don’t see any force in your objection.

        Dante having Aquinas praise Francis I suppose is a way of showing the love present in Heaven by the love of rivals towards one another. That in no way shows that Aquinas agreed with Francis on poverty, which he didn’t.

      • Anastasio Pelè

        I was commenting your sentence: “Dante sides with the Franciscan Order over the practice of poverty”. No, Dante explicitly affirms that Francis’ (and Bonaventura’s) and Dominic’s (and Thomas’) teachings are one and the same. He views both monastic orders as a necessary return to the original poverty of the Church.

        I guess I also don’t agree with your claim: that for Thomas “poverty isn’t required for charity”.
        Thomas explicitly DEFENDS the right (of both the individual and the monastic orders) to own nothing, to be utterly pauper. Surely he had disputes with Franciscans; in his opinion, the Franciscans saw poverty as an end in tiself, while he sees it as merely a means to an end (the perfection of Christ). However, he never disputes that to be perfect one must be like Christ, and this also means to be pauper.
        Maybe our positions are not too distant; I guess that Thomas (and Dominic) agreed with Francis on poverty, but not with the extremes advocated by most Franciscans.

      • Mark

        Anastasio, I find your language way too loose and generic. It could mean anything, or nothing.

        You say “Dante explicitly affirms that Francis’ (and Bonaventura’s) and Dominic’s (and Thomas’) teachings are one and the same.” What kind of bizarre monism is that? Maybe everything is one, including you and I. If Dante explicitly affirms it, I’d expect you to explicitly cite him so we could judge for ourselves.

        You say Aquinas “DEFENDS the right (of both the individual and the monastic orders) to own nothing”. No one is against poverty. The question is whether poverty can be required of another for inclusion in a group. Aquinas did not accept this. Nor do I, nor should you. You probably don’t, but since I can’t tell what you’re saying in your extremely vague language, I really have no idea.

      • Anastasio Pelè

        I already cited the verses where Dante says that by praising Francis one also praises Dominic, since their works have but one goal. It’s Paradiso XI:

        “One was all seraphic ardor, the other was on Earth the splendor of a cherub’s light for his knowledge. I will speak of just one of them, because by praising any one of them I will tell of both, since the works of both had but one goal”

        “L’un fu tutto serafico in ardore fue,
        l’altro per sapienza in terra
        di cherubica luce uno splendore.
        De l’un dirò, però che d’amendue
        si dice l’un pregiando, qual ch’om prende,
        perch’ad un fine fur l’opere sue.”

        I don’t see Dante taking sides.

        Regarding Thomas’ teaching, I’m not a philosopher, so I’m sorry for my sloppy language use.
        It seems to me that Thomas puts poverty as a necessary means for achieving perfection in Christ, also citing Matthew 19:21
        “Jesus answered: If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”
        Maybe you’re not required to give everything to the poor, maybe this only applies to monks, but to achieve perfection you should strive to do what Christ did and teached.

      • Mark

        I was sloppy myself. I went too far in what I said about Aquinas. But I stand beside the idea that Dante did indeed take sides in the poverty controversy with the Franciscans. I think you are taking Dante at is word. Of course he as a Christian poet is going to say “Hey the Dominican and the Franciscan’s were both right, and I’m with them!” Poets are idealists. But would that make it true? No.

        There is a yawning gap between what you have Dante saying and what his emphasis actually show he must have thought. You might want to read Nick Havely’s book “Dante and the Franciscans: Poverty and the Papacy in the Commedia”. I think there is little question that Dante saw things along Franciscan lines on that matter.

        Havely shows that Dante’s invective against the papacy in Paradiso 18 & 27 draw quite specifically from what he calls “the ruthlessness of John XXII’s approach to the Spiritual notions of strict observance” (p 167), as well as to the writings of the dissident Spirituals who opposed the papal position.

        And on Matthew 19:21, despite what Thomas says, most would caution reading this as a universal. Jesus only asked one man in scripture to give up his wealth. Presumably, that was because this man loved it too much. I suspect if he’d said “sure I’ll give it up” (which Jesus knew he wouldn’t and hence the statement) he’d have been told it wasn’t necessary. Like Isaac with his son.

        So I still see shades of the poverty controversy in current debates, the Franciscans as having an extreme view that should be avoided, and Dante arguably on the side of the Franciscans, and wrong.

      • Anastasio Pelè

        Wonderful discussion Mark, I am enjoying it immensely!
        But of course I don’t agree with you!

        You: “But I stand beside the idea that Dante did indeed take sides in the poverty controversy with the Franciscans. I think you are taking Dante at is word.”

        I’m not convinced. Where exactly in the Commedia does he indeed take sides? I mean, not just praising Francis, but also praising Francis OVER Dominic? I’m not being ironic, I genuinely want to know, since I don’t know all Commedia by heart.
        Regarding Paradiso 18 & 27, both beggar orders (Franciscans and Dominicans) were born to compensate and correct for the extravagant luxury of the Papal seat, so I guess that both Saints would have agreed with Dante’s invective…
        And, beware: are you sure that Dante prefers the poor, ignorant Franciscans, when his Commedia takes place in a complex, Tomistic (as in, “following Thomas’ philosophy and teachings”) universe?
        And I find “you are taking Dante at is word” a curious statement: where else should I look to understand the Poet’s thinking, if not at his verses? Sorry, but I will take Dante’s own words any day to understand him.

        Regarding Christian doctrine specifically, I know that it is accepted that even rich people can be saved. But I’m not really convinced. Jesus only asked one man to give up his wealth IN THIS INSTANCE. But he also said, “It is hard for a rich man to enter the kingdom of heaven. Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.” This applies to all of us. And most of all, he said: “A new command I give you: Love one another. As I have loved you, so you must love one another.” and “Love your neighbor as yourself.” So, how can I love my neighbor as myself and let him die hungry when I have too much? How can I be rich, in a world where poverty is everywhere? How can I earn 1k, 10k, 100K dollars a month and be saved, enter the kingdom of God, when other people try to live with 1 dollar a month, or die outright due to extreme poverty?
        I’m not saying that I, personally, am giving everything to poor people, just that maybe I should, if I wanted to be a good Christian…

        I know, too long a response.

      • Mark

        I’ve enjoyed it too Anastasio. I learn a log in disagreement as I have here. By “take sides” I didn’t mean explicitly. I could have stated my view more clearly by saying “it seems he did prefer the Franciscan view”. That would be based on things like choice and emphasis as I’ve tried to show. But not directly, because I don’t claim to claim to have special knowledge of Dante or his works. Not at all. It’s not my thing. I look to experts for that. The view I’m taking is basically my judgement on who of those who’ve dedicated decades to it have the better evidence.

        >> “Where exactly in the Commedia does he indeed take sides? I mean, not just praising Francis, but also praising Francis OVER Dominic?”

        I take the view that excellence is a type of mean between extremes, the classic and I would say also a commonsense view, so I want no part of any project to discredit the Franciscans except what I see as a radicalism on poverty which includes ownership. But reality is such that we can’t abstract from the politics of any time period, and Dante’s day was no different. Surely he saw one side (Franciscans/Dominicans) as the more necessary to the problems he saw at the time in his own society. Surely anyone would, and surely we all do on any given issue. How could any one hold to a perfect neutrality? It is impossible on any culturally relevant issue, and that fight between the Fr/Dom was huge. Only in a bare statement can a perfect neutrality be expressed and claimed: “I am neutral”. That doesn’t make it so.

        The higher the level of controversy, the less likely we’ll find people without a view that leans one way or the other. In reality everyone is going to see a greater merit at a given time in one position or the other on a controversial matter even when they see truth in both sides, and the necessity of both sides to a debate. I’ve only targeted Franciscan radicalism. You seem to want to have Dante as holding idealistic standard of perfect neutrality that I don’t think is at all realistic. He must have had preferences for one side or another in a highly controversial public matter. I think radicalism was at the core of the issue. But literary works are much more complex than crude statements such as “I am neutral”, and all literary and philosophical works should be read critically if we’re to treat them as educated people should. I mean “critical” in only a commonsense way. Please don’t read into that statement any postmodern nonsense to which I don’t subscribe.

        About neighbor love, I can’t “love my neighbor as myself and let him die hungry when I have too much”. I agree with you. The real question isn’t that, but, as the Parable of the Good Samaritan shows, “who is my neighbor”. Political philosophy will be key to how best to treat the wider groups not necessarily my neighbors. But as far as the passages about the rich entering heaven, all I can say is that they do puzzle me. I wonder though about the extreme primitivism of the ancient economy. I think virtually all of the time the only way to get rich was to take it from someone else. I think we miss sometimes how much things have changed, and how much whether or not we live in a “zero-sum” economy determines our views. Maybe that is too dismissive of those biblical passages, I don’t know. But I just don’t see that poorer people are more virtuous.

        That is about all I can say. I think we’ve fleshed out where we agree or disagree about as much as we can. You can have a last word and I’ll read it with interest but I don’t think we’re at a point of diminishing return. It is natural thing. Thanks again for the intelligent discussion. I’ve enjoyed it.

      • Mark

        Anastasio, I forgot to say that was my general answer since it seemed you rejected my direct answer on the poverty question. I already quoted a translation of Dante that you’ve rejected for reasons never clear to me so I tried to show the problem of idealism by taking another tack.

        But in fact when you say:

        >> Where exactly in the Commedia does he indeed take sides?

        My answer is the same as before. Canto XI. Can you tell me again why this is not sufficient for you?

        Lest I seem obscure, speaking in this way,
        take Francis and Poverty to be those lovers.
        that in plain words, is what I meant to say.

      • DesDizzy

        Doesn’t it say in the Bible that it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of heaven?

      • Anastasio Pelè

        “Rotta” in this context probably means “corrupt”, Italian “corrotta”: “she was so corrupt by the sin of lustfulness…”. In Italian, “lussuria” to this day means “lust”, not “luxury”. While in ancient Italian it could also mean “luxury”, this is probably not the case here: the souls punished in this circle are explicitly lustful people, and the sin is a “love” sin (Paolo and Francesca are punished for their unlawful love and for cheating on her husband / his brother; Dido “killed herself for love and did not keep her faith to the memoir of [her late husband] Sicheus”). Nowhere is there any mention of money, conspicuous spending or largesse. Moreover, prodigal (and miserly) souls are punished in another circle, the fourth one (they are fewer in number and their sin is worse).

  • jbelkin

    Apple is totally unique. That is what many do not understand. Apple is the first MASS MARKET luxury company. It’s that simple. There have obviously been a lot of either or but no one has succesfully figured out how to sell enough lux fo maintain lux & yet be mass market … while MB and BMW come close, their floor is still much higher – in today’s dollars, they cannot really come down below $30k – Apple does have the subsizdized advantage with an iphone (but autos have the lease option) but a BILLION sold later or a $299 ipad does not diminish the “halo.” just like Silicon valley just seems to be a nice place to live, no one can replicate it exactly … it’s EVERYTHING …just like Apple – you cansurface copy them but no one can really copy them – that’s not to say they’re gold forever but in the ext 5 years, they are gold.

    • Mark

      They are totally unique. And it is hard to get my head around what Apple is doing with the gold watch. Mass market luxury seems so counterintuitive, and yet I think you’re onto something.

      Perhaps Mercedes would be an analogy to Apple watches if their cars were really fundamentally better and five years ahead of their competitors even *if* they had the same seats, sheet metal, and shape as any other car. The fact that they had luxury in those elements too would be a bonus. But that isn’t the case. I know cars considered to be lower quality and pedestrian that are engineered in such a way they they drive comfortably, reliably, and cheaply for 250k miles. I think with Mercedes or any other luxury make you have to pick two (or even one) because you can’t have all three.

      I think that is what the Apple watch is. A better engine, drivetrain, and chassis no matter which one you pick. Want a gold one? You get all three. The best luxury machine. It’s crazy. Critics will say it works no better than the cheaper models, but as I’ve already said that, contrary to myth, a luxury machine that works no worse than the mass market inexpensive ones is a first. It’s the best of both worlds, and the luxury comes with no hidden costs. It’s a first all the way around, and that explains the confusing of the pundit-industrial complex.

      I have no idea whether or not the watch will be that successful as a machine since I can’t try one and I’ve seen no reviewers I’d trust have one. (BTW, why aren’t we hearing from Mossberg?) But if the watch is successful, the gold watch will be successful too. That much is assured.

    • http://twitter.com/matthewwanderer Matthew

      “Apple is totally unique. That is what many do not understand. Apple is the first MASS MARKET luxury company.”

      This is an interesting take. One I don’t necessarily agree with. Unless you’re speaking about the first mass luxury _technology_ company, there are earlier examples.

      Top of mind, Ralph Lauren is an example of a mass luxury company.

      • http://www.asymco.com Horace Dediu

        I doubt Ralph Lauren has (nearly) one billion loyal customers spending $1/day for each object they purchase from the company.

      • http://twitter.com/matthewwanderer Matthew

        Hi Horace,

        No argument there. I was responding to the statement on face value.

        As it relates to the Watch specifically, I’m convinced there’s a lot to glean from the experiences of other companies in the mass luxury category.

      • http://www.asymco.com Horace Dediu

        You’re assuming there is something called “mass luxury category”. I say there is no such thing. There are no categories. There are only jobs to be done.

  • berult

    22 hs
    “Abdel Ibrahim ‏@abdophoto
    I would LOVE to hear a roundtable with @gruber @asymco @BenBajarin @monkbent on *why* they are interested more in Apple than Google as a co.

    Horace Dediu– ‏@asymco

    @monkbent @abdophoto @gruber @BenBajarin Apple is the ultimate anomaly, Google is a rather mundane monopoly.”

    That is the complete answer, the full explanation.

    Now, if you wish, let me propose an abbreviated version of it…

    Prima facie is no way to treat a lede…

    …for it tangles one’s sways. Gasping for yore…gasping for fore, rasping for best…rasping for…lest… Greatly…’back to the drawing board’, much…’backdrop’, somewhat…’backend’; a yearning for relativism feasts on radial evidence, none too replete with more of it in play. So let it be…greatly, much, somewhat…and give ’em outsourced adverbs, insourcing props…

    The challenge for any resource-rich enterprise in today’s socio-economic landscape, is to bore through the canvased dermis of an entrant’s physiognomy, with the ‘on the cusp of extinction’ dynamism, the ‘still life’ wherewithal of sunset incumbency. Nobility of intent in a “let bygone be bygone” mantra, the counter clockwise response to the ill-ticking of a potentate’s clock, does not synchronize well with the reactionary tempi of a lingua Franca.

    Nowadays, staple-consumerism happens to germinate best when sown capillary-deep into Apple-abstracted topsoil, whilst thoroughly irrigated off gestalt-derivation canals. One could push to market ‘see through the soul’ glasses, goggles, head gears, ‘nose for the net’ servers and what not, the ‘Apple credibility test’ will, whenever the chips fall, metricize both the vibrato of success…a sensuous rarity, and the tremolo of failure…the ‘good-enough’ endemic, in meeting…with steadfastness of intuition…the inherent fickleness of a consumer’s temperament.

    The sole term of endearment in the supply and demand realm axiomatizes the charm… There can’t intrinsically be a conflict of interests in engaging a market from two different angles of a single thought process. Supply and demand equate, interchange, through immutability of disinterestedness. Allegorical Math, …Art…, scripts the equality sign, ….mends into solace membership the intertwining equation. This a-mending mindset…Apple’s, in its pervasive-mindshare edition, draws the aspirational contours of an inspirational diaphragm; trades-taketh, breeze-giveth by Aristotelian osmosis.

    Interstices withstanding, past participles vouch for present participants, …vagaries notwithstanding. Way back when, the Spanish Inquisition quested and queried a white->purple->crimson->black avenue for bearing down on heterodoxy. ‘La Question’, posited rather then posed, an Athenian ciguë-questionnaire…the idiosyncratic response to “too Socratic a question”, …mired in sententious, syn’tactic exactions. Much travail…to wee avail, as the grand scheme of things…ethics, aesthetics, economics, and…holy mayhem, sprouted upward, azure-bound, …witness Spring blooming upon Winter’s tail to abridge a sparrow’s Fall…, from orthodoxy’s barren trunk. The tree of life could thus summon estranged, beholden rays…rainbow-robed iridescences…to partake, so illuminati-attired, in the shadows’ penance.

    And here are we, Riesling a Renaissance of sort, a new-economy fulcrum. Vintage Apple fulcrum at that, sniffed through the reformative fragrance of its pivot mechanism. Integration, conservation, collaboration, motion, emotion, crafted cum crafting introspection, …all-in-one pervasiveness both in the real and the ethereal worlds of both mass production and mass consumption. All craft, no graft, …on an above-the-surface, planetary scale. The quandary brought to bear by alien-system gestation, and its antibody production, has been set in epiphanic stone… Espousing an Apple-like mindset should be, will be, is the norm…! A counter-nature undertaking for anyone legacy-rewarded to, on cue from a howling point ever beside the point, blind-side apostasy! Espouse…or forsake born-again! …or beguile a stillborn!

    How then could a shooting star’s riches be harnessed to override fortune-offsetting gravity?

    Hmm…It wishes upon a black hole it knew… Spare time, spare dime aplenty, it dangles about, weaponizing its pulp-smorgasbord to Saladin-fruition. Adding pits to pulp, it arms to the teeth a one-off ‘luck luster’-‘new money’ corollary, the God-identity syndrome. The arsenal…? A “either star stuff or stark stuff they cut their teeth on…I tell ya!” drilling platform. One which burrows a rodent imperium incisor-lengths beneath an iconoclastic groundswell of the fast-eroding plane. Talking the syndrome talk…with preordained support and absolution. Tunnel-visionaries play mice, so liberally so, with Nature; the natural order of things plays dice, so conservatively so, with tunnel vision. For walking the syndrome walk, the tooth and nail trihedron, on pure reflexive DNA, indents human nature with the simple clapping of its flaws…

    “Mirror…mirror…who is the fairest of them all?”…exclaims the fairy-mouse orator in a rhetorical flight of fancy, …as though this had ever been a question craving for the fairest of answers…

    …and lo and behold, …”” …, ’emoticons’ the mirror, in a post-sycophantic frenzy…

    “Non…nein…I mean…no..! That cannot be! … All right, I’ll…bite! A poisoned AAPL thus it shall be!”

    Truer words were never spoken. And yet, true words were never again spoken by the one ‘Herr Heir’ to the byte-bitten almighty. For bite, alas, as the reflecting G Glass so clairvoyantly displayed, the three-legged, gnawing fractal, …embracing the ferrous of all manners…, subterraneously overdid…overdoes still…to this day…

    In a googling-about sub-universe, the obsequious plot wanders abreast nihilism. Foment-geometry laces up a timely conscription with a space-less tragedy; the catalog heads for the market square…and from the very motion of it, the very notion of it never gets there. Ever so far, …ever so close. Ever so close, …ever so far. The below-the-surface world of asymptote-ethics. The further…or closer…the under-miner gets to an elementary pathos-particle, the less…or more…ethos’ strings-set vibrates to the repulsion law’s frequency.

    Now, if one, as one surely should by now…least it be as a scatological tit, for tat rodendant wit…, does give a rat’s derrière about any of this,

    …a fabulating lede is yours-truly’s way to treat a skewing prima facie.

    berult.

    • katherine anderson

      Beautiful; Thank you

  • equanimous

    While the larger point absolutely stands, 64GB of flash memory costs much more than $5. See dramexchange for very rough estimates – Apple’s agreements will be different of course. Much complexity in flash module costs (flash, controller, packaging, reliability/retention requirements etc.)

  • edition

    If you get an edition, do you get any freebies thrown in? If you spend $15K at Chanel or Hermes, you get extra grovelling from the staff and they’ll throw in perfume samples and like booklets and things. Even if you spend $1000. What’s the “little extra” you get with the gold watch?

    • jinglesthula

      I’ll take the steel Watch and average amount of grovelling, I think.

  • Gerald Owen

    Before we get back to the good and bad sides of
    luxury, in Apple and elsewhere — one or two commenters here forget that
    medieval writers, such as Dante (like later Renaissance writers), were steeped
    in Latin language and Latin authors; “Italian” or “Tuscan” or “French”, for
    that matter, were regional vernaculars, dialects that were taking on lives of
    their own, but not fully separate languages. So they wouldn’t simply separate
    the Latin word luxuria from the slightly worn-down Italian form lussuria. The
    Latin foreground and background were always present to anyone who could read.

    The Latin range of luxus and luxuria is wide:
    luxuriant trees and foliage, the extravagance, abundance and affluence of urban
    life, the luxus of a splendid royal palace such as Dido’s (Vergil, Aeneid I
    637) or a luxurious banquet, and so on. See also Vergil, Georgics, 1.112, and there
    are similar passages in Horace and Cicero and other authors, also read in
    Dante’s time.

    And of course Vergil himself is Dante’s
    interlocutor and guide all through the Inferno: all through Hell. It’s true
    that the passage that’s been discussed is about illicit sexual lust, but it is
    there as an aspect of luxuria that is broken, rotta (a word related to “disrupt,” “corrupt,” “erupt,” “rupture,”
    etc., by the way) – but there can surely be beauty, magnificence and splendour
    that doesn’t end up in Hell, the Inferno, and so is not broken – and is
    enduring.

    Thomas Aquinas feels it necessary to explain in
    a chapter heading that when he presents luxuria as a vice (Summa II-II,
    question 153) he is dealing with the specific type of luxuria that is opposed
    to chastity – implicitly, there is a wider range of luxuria, perhaps relating
    to different virtues, or perhaps neutral as between virtues and vices.

    As Mark Howard said in this exchange, Aquinas,
    a Dominican philosopher, was more open to the good side of wealth than the
    Franciscans, whose practice of poverty Dante preferred (take a look at Aquinas’s
    commentary on Aristotle’s Politics, Book I, though neither of them favour
    unlimited technology).

    But to get back closer to the matter of Apple
    and luxury, it’s true, however, that the good side of what we and the ancients
    called luxuria may have been better articulated in the Greek word
    megaloprepeia, translated into Latin as magnificentia or magnificence, which,
    according to Aristotle (Nicomachean Ethics, Book 4, chapter 2) and Aquinas
    (Summa II-II, question 134), is an actual virtue, a variant of liberality or
    generosity. Aristotle says the magnificent person is “a knower,” and as he
    says, “the work [of art, let’s say] ought to be worthy of the expenditure, and
    the expenditure ought to be worthy of the work.” Both Aristotle and Thomas
    recognize that sumptuousness (sumptus magni) is necessary to this, though of
    course it is not an option for those who can’t afford it – this “big spending”
    is in quest of “the beautiful” (EN1122b) – and the virtue of the work is in
    grandeur or greatness. The work is often a kind of votive offering to the gods
    and a generosity to the community … while “parvificence,” the opposite, is a
    vice – maybe including the vice of cheap knock-offs, we might say. Beauty and
    durability are at least compatible.

    • Mark

      This is an impressive comment, and helpful. Thanks for it. I would love to know your study methods and recommended books.

      • Gerald Owen

        Thank you for your generous reply — I’m an editorial writer, by trade, at a Canadian newspaper, The Globe and Mail — but I’m an amateur student of political philosophy and literature, and I try (with varying levels of skill) to read old books in their own languages, which means that I’m quite absorbed in words and their changes of meaning — as you may have gathered!

  • http://www.laimarket.com Raymond

    i bought a 38mm Apple Watch from http://www.laimarket.com and how to use it