As we move towards a future of wearable devices, will they be something more closely related to the jewelry and accessories we already wear or will they be closer to consumer electronics. Up to this point, every wearable piece of technology has quite decidedly been a consumer electronic. They are made from the same materials as our cell phones and are priced to be replaceable and upgradable. But that is not how people are trained to think about jewelry and accessories. We have grown accustomed to craftsmanship and materials that make them unique. If you watched last week’s Apple Watch announcement, one word you did not hear was “smart watch.” That calculated move was reinforced by no mention of competing products already in that space (something Apple has not hesitated to do during other tentpole announcements such as the iPod and iPhone). It is quite possible that Apple thinks the way to succeed in the wearable market is to create something that is closer to jewelry.
Looking at the materials of the various tiers of the Apple Watch, it is clear that most of them will be very expensive. The solid gold 18-karat gold version is likely to cost thousands of dollars and the stainless version could easily be around a thousand dollars. Without a doubt, these are not the prices one expects from a consumer electronic. They are closer to what a fine watch would cost. This is actually a clever approach since there is already a proven market for these luxury items. The difference is that typically they last for decades or even generations — a connected watch would be obsolete after a few years.
If Apple releases their watch with the view that it should be fine jewelry and not a consumer electronic, how will consumers react to the pricing? This would represent a new model in how electronics are sold. Are customers more likely to buy and wear something that feels more like a premium watch versus a consumer electronic? As much as the pricing would seem like a barrier of entry, the true barrier is more likely to be the reoccurring upgrade costs. If Apple, or another company taking a similar approach, can manage to allow the devices to be hardware upgradable or exchangeable for the next generation at a nominal fee, then the jewelry approach to wearable devices might be successful. Otherwise, I don’t see very many shoppers being pleased at spending thousands of dollars for something that will be outdated in less than 12 months. It seems that besides finding the right mix of features, producers of wearable devices now need to start thinking about how they are going to position themselves with pricing, materials, and build quality and then what does the upgrade model look like.
