The Apple Watch’s Insanely Great Economics

Businesses almost never work like this. Typically, they either try to introduce a new premium product to a market that’s been commodified, or they try to compete on price, in markets that award very high margins to ultra-premium segments. (Think of Audi ten years ago: Cheaper than a BMW, almost as good.) To date, Apple has mostly pursued the former strategy—and companies almost never switch it up. You’ll never see Rolex try to sell a $300 watch, because of the catastrophic damage it could do to its high-end sales. Likewise, G-shock would be insane to attempt to sell a $1,000 watch, much less a $17,000 one.

Via The Apple Watch’s Insanely Great Economics | WIRED

Apple working on both side of the market with a single product. The article is right, no business has tried this.

Advertisements