Apple's watch may create tech luxury niche

Apple Watch, the next best thing from ‘one of the world’s most loved technology brands’, has kept everyone from the lay enthusiast to the tech whiz gripping his seat in anticipation ahead of its release in April.

Interestingly, the Apple Watch is expected to be positioned in a massive price bracket between $350 and $17,000, to be sold in nine countries, including the US and China, with sales expected to hit India in the months succeeding April. The prices are for the same product with similar features, with the only differentiator residing in the material used in the casing — the Watch Sport will have an aluminium casing ($350-$400), the Watch will have a stainless steel casing ($550-$1,100) and the Watch Edition will be encased in 18-karat gold ($10,000-$17,000).

When Deccan Herald spoke to a few brand gurus to understand the varied price positioning of the product, they mentioned that a marquee brand such as Apple might just end up evolving a new market segment in the name of ‘tech luxury’, but also confessed that the American devices giant must overcome certain challenges.

According to Brand Union Managing Director Arvind Hegde, “The company will manage a 100 per cent premium for its entry and mid-level watches (Rs 30,000-Rs 1 lakh) and might even redefine that part of the market, but the true drama is likely to unfold in the luxury segment.”

Hegde said that Apple must find a way to differentiate the watch as a luxury product, beyond a lifestyle one.

“The current top luxury watches are differentiated for being handcrafted and limited edition pieces. The first pillar of luxury is exclusivity. If everybody possesses a particular product, its exclusive element is lost, so also its luxury element. So it is to be seen if Apple sells its top-end watches exclusively or whether it will democratise their sale. Eventually, a new market may be reinvented at the top called tech luxury.”

The Indian consumer is considered to be phenomenally value-conscious, and this value is not necessarily attached to money, but to prestige and aspiration. This is evident when one looks at how Indians have taken to Apple products in a big way.

Unlike a conventional watch, Apple’s smartwatch will be open to upgrades, and Hegde said that the company must look at keeping the gadget relevant, especially at the top-end, with different, exclusive upgrades.

“In a watch, if it’s just 18-karat gold, it’s not enough. Some added magic is needed in the expensive models that the lower models don’t have. And as far as the watch’s popularity is concerned, early adopters are the key to its success.”

Deloitte Haskins Partner Ashesh Jani said, “India is being taken away by competition, where there are similar features in different products at different price-points. There is rarely a niche market nor a niche product. As a brand, Apple’s products have appealed to different parts of the market. A new market is likely to be created by the watch.”

With the gold watch, Apple might still pull it off just as star-studded and gem-studded phones sold earlier. It is human nature to have tastes and preferences, he said.