Sizing the luxury watch market: it’s big

It is currently 29mm at say 300 each. Rolex is 600k at $7,000 average selling price ($4.7bn revenues).

Apple will of course expand the market a lot and have a huge share of that market. 30mm –> 300mm in ten years? Apple takes 30%? Plausible.

Less obsolescence cycle than phones but more “always handy” usefulness than tablets and laptops. Less industry structure conflict that phones and TV.

Seems awesome


Meanwhile, while Apple’s annual gold supply alone would be worth $28.8 billion, luxury watchmaker Rolex sells “only” $4.7 billion of product every year, from an estimated 600,000 watches.

There are two conclusions we can draw from this scattering of data. The first is that Apple is about to take over the world. Not only will it be the most valuable company on the planet, but it will also be bidding for a third of the world’s annual gold supply, wreaking havoc on gold prices and doing who knows what to the global economy.

The alternative is that the esteemed Wall Street Journal is off on its Apple Watch Edition sales by an order of magnitude (or more). That would put the number at 100,000 per month, which seems more plausible.

Don’t get me wrong, it’s never safe to underestimate Apple. If anyone can sell 12 million $10,000 quasi-disposable smartwatches a year, it’s Apple. But once you run the numbers, it sounds nuts. Estimates from put the annual unit sales of high-end watches made in Switzerland and Germany at about 27 million in 2013, and another industry site, W The Journal reported that all of Switzerland exported about 29 million watches in 2012. Could Apple push up against 45 percent of the entire current luxury watch industry?

Part of the Apple Watch Edition’s appeal will be exclusivity. What’s the fun of wearing $10,000 on your wrist if every other schmoe with money to burn is wearing one too? It’s only fun to join an exclusive club if it remains exclusive. If anything, too much popularity may limit sales.

Via NYT Now:

How Much Gold Will the Apple Watch Edition Consume?

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