Looks and Materials Are Vital for Apple Watch’s Success in the Luxury Market, TrendForce Finds

Apple Watch has been revealed as scheduled and its price varies according to models, ranging from US$350 to around US$10,000. Though Apple does not offer anything revolutionarily function-wise, the company is confident that product designs and quality of materials alone will propel their smartwatches into the luxury market. 

Jason Tsai, a wearable analyst for Topology of TrendForce, stated that the launch of Apple Watch will have a huge impact on the traditional watch market because its target customers are people who usually do not wear a watch. “Apple’s intention is very clear,” Tsai explained. “The company wants to become a luxury brand that sells not just products and services, but also fashion and class.” 

Tsai added while there are some concerns with the device’s battery life, the shipments of Apple Watch in 2015 are expected to reach 12 million units. According his initial projection, Apple will take over nearly half the share of the smartwatch market. Selling at a high unit price also means that these smartwatches will bring billions of dollars to the consumer electronics giant. 

Having unique selections of facade materials are the key to Apple’s success. Most smartwatches currently on the market have similar functions, so Apple must provide something additional and superior besides the basic values when setting a range of prices for each edition of the Apple Watch. Every model of the Apple Watch offers more or less the same features and services, but they ultimately are differentiated in pricing and market positioning based on the quality of their materials – from aluminum, which is suited for sports, to luxurious 18-karat gold; as well as from durable fluoroelastomer to classy leather. Other smartwatch makers will likely to imitate Apple’s strategy of creating different values for the same functions with distinct style of packing materials. As a result, demands for materials used in watch casings will increase significantly. Some of the resources that will be greatly sought after by the competing vendors include sapphire, which is used for watch covers; ceramic, which is used for back covers; and leather, which is used in watch straps.