Apple Watch, a literal gold mine for Apple

When Apple announced its latest offering for the first time, it quoted its starting price at $349, but soon after it also announced that the Watch will come in a pure 18 karat gold version called the Apple Watch Edition. Speculations have been around for a while on how much a gold Apple Watch Edition might cost and the consensus seems to be that it won't be cheap. Two recent articles on this topic answer a lot of questions on this topic. First one is from John Gruber as a response to a WSJ journal article on Apple supposedly ordering around five million Apple Watch units for it first year of launch. 

If Apple actually sells 1 million Edition units per quarter, and they sell for an ASP of $5,000, that’s $5 billion in revenue per quarter — just for the gold Edition models... 3 million Sport units at $350 comes to “only” $1 billion or so. 2 million stainless steel regular units with a $1,000 ASP would be an additional $2 billion.
— John Gruber

If all these numbers are even remotely close to reality, Apple Watch itself, in its first year of launch could be an almost ten billion dollar product for Apple. And imagine what profit margins Apple will enjoy on a product that is clearly marked as a fashion accessory unlike its other products that are primarily consumer technology products that are (slightly) more fashionable than competition! 

The Apple Watch - a gold mine that Apple managed to invent? (Source: Apple.com)

The Apple Watch - a gold mine that Apple managed to invent? (Source: Apple.com)

A second piece on the probable price of the Apple Watch Edition is from a "serious" watch guy. If you had rolled your eyes when you heard $5000 for an Apple product that was not a Mac Pro, then think twice, as according to this guy, $5000 might actually only be the lower limit of the price for the Apple Watch, he thinks it might cost as much as $10,000!

My prediction is that the 42 mm Apple Watch Edition will retail for $9,999 with the 38 mm Apple Watch Edition retailing for $7,999. This covers the cost of the gold case, the internals, manufacturing, sales, and profit, and yet does not leave Apple subsidizing the world gold market by selling at a discount or cheating with a too-thin or plated case. I will be shocked if the price is $4,999... (on a later update) Even if it contained less than $1,500 of gold, how much would it sell for? Certainly not $2,000 or $3,000. You still have to account for the cost of everything else, plus the intangibles of manufacturing and distribution. And profit for Apple (and a hedge against the volatility of the price of gold). So we’re back at the $4,000-$5,000 estimate others have made.
— Stephen Foskett at Grail Watch