Can Apple Watch Edition Compete With Rolex?

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With Apple having recently unveiled the Apple Watch, the expensive version of the smartwatch entitled Edition has garnered the most attention. This luxury version of the Apple Watch is accompanied by an eye-popping $10,000 price tag, with the most expensive version of the Edition retailing at $17,000. No doubt this Apple Watch will still entice devoted fans of Apple devices, and those who are attracted to luxury watches. But does it represent a better investment than Rolex?

Iconic Rolex

The Rolex brand is one of the most iconic on the planet. Although Apple has been recognized by the authoritative Interbrand survey to represent the most powerful brand of any company, Rolex is operating in an entirely different sphere. The Rolex name is redolent of luxury and quality, and the reported $15 million it pays annually to that most elegant of sports stars Roger Federer underlines the image which the watch manufacturer is attempting to convey.

Rolex has positioned itself very skilfully as a high-end manufacturer, and has nearly a century of tradition underpinning its reputation, which will unquestionably pose problems for Apple to take it on directly. If one were to consider the opposite scenario, would Rolex have any chance of launching a successful smartphone?

Of course, what Apple is attempting is a significantly more feasible undertaking than manufacturing consumer electronics from scratch. And one certainly shouldn’t underestimate the largest corporation on the planet in terms of market value. Apple has huge resources and competence, and has certainly gone to great lengths to ensure that the Edition version of its smartwatch is an attractive proposition for luxury watch collectors, with the device featuring an 18 karat gold case and stylish design.

Apple Watch challenge

However, despite the fact that the Apple Watch Edition clearly sets itself aside from existing smartwatches, establishing itself as a luxury player in the watch marketplace will be a considerable challenge. Watch market experts and analysts still consider the Apple Watch to be a mass produced product to a certain extent, significantly distinguishing it from luxury manufacturers such as Rolex and Cartier. Indeed, the internal workings of the Apple Watch Edition are exactly the same as the more affordable Apple Watch variants.

While Apple can call upon the market power of its name in consumer electronics, the Apple brand doesn’t carry the same clout in the luxury watch marketplace. Apple Watch effectively possesses no historical merit at all, and despite the relative exclusivity of the Edition model, it will have its work cut out to compete with established and prestigious brands such as Rolex.

A Rolex watch will remain a massive status symbol for the foreseeable future. Much though the iPhone is a renowned and valued accessory for consumers all over the world, it will be extremely difficult for the Apple Watch to claim this status for quite some time.

And another aspect of Rolex which has particularly favored the corporation over recent decades is the fact that purchasing one of its watches is a sound financial investment. The physical value inherent in a Rolex is quite large anyway, but the pricing of such luxury items tends to inflate significantly over time anyway. Of course, it is not only luxury watches which are prone to inflation, but typically goods at the high end of the market tend to retain, and even gain, value more readily than more mundane items.

Apple Watch impact

However, although the Apple Watch Edition may struggle to compete directly with Rolex, it has already been predicted by experts that the release of the smartwatch will have a significant impact on the general timepiece marketplace. Swiss watch manufacturer Swatch is one of the companies which has been identified by analysts as being vulnerable to Apple Watch models.

It has been suggested as well that the Apple Watch could be seen as a complimentary device for collectors of luxury Swiss watches. Possibly in the future we could see the wealthier individuals among us wearing a Rolex on one wrist and an Apple Watch smartwatch on the other.

This prospect does pose another question; will the Apple Watch lead to a surge in the smartwatch market which will threaten smaller watch manufacturers? It is perhaps fanciful to suggest that smartwatches will wipe out the traditional watch, but it is the case that they offer something extra to traditional watches, while serving all the functionality of the conventional wristwatch.

Certainly some watch manufacturers will be threatened by the existence of the smartwatch, and it may lead to a rethink in this marketplace. For the time being, the Apple Watch will remain a niche product, but in years to come it is possible that we may even view this mass produced item as a vintage and collectible piece.

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