Why the Apple Watch Is a Boon for the Middle Class

March 9, 2015 Updated: March 13, 2015

Apart from being attached to your wrist, one of the most unique features of the Apple Watch that distinguishes it from previous Apple products is its extreme price segmentation. The basic Sports Watch with a rubber strap starts at $349, with the price rising all the way up to $17,000 for an Apple Watch Edition, plated with 18-carat gold; mid-range stainless steel edition prices are from $549 to $1099.

The Apple Watch is seen as Apple’s entry into the luxury goods market, a move decried by some as injecting status competition that previously didn’t exist in the tech gadget ecosystem.

“Well, iPhone users: welcome to the world of gadget-based class anxiety. Today’s Apple Watch announcements will introduce devices you can’t afford, with features you’ll never be able to get,” wrote Fusion’s Kevin Roose.

Even as the Apple Watch might inflict some psychological discomfort for Apple customers, the product will allow Apple to enlarge its share of the luxury goods market, which is ultimately good for its user-base because of Apple’s role as an innovator.

Those who would spend $17,000 on a watch that will probably be replaced in a year or two will dispense with their wealth on luxury goods one way or another, and if they don’t spend it on the latest gadgets from Silicon Valley, they’ll likely pick up an alternative like a Rolex.

The difference between Apple and Rolex is that the former has been a relentless innovator that’s willing to reinvest its profits into making products for a large, middle-class user base, coming out with new products in regular cycles. The larger the share of luxury consumer goods sold by Apple, the more revenue from that markets goes into exploring inventions that benefit everyone. 

Moreover, prices for Apple Watch will naturally decline when it’s no longer a novelty item for early adopters and the product brand expand downstream. When the iPhone was introduced in 2007, then Microsoft CEO Steve Ballmer said that at $500 after being subsidized with a cellular plan, it was far too expensive to be successful. At Apple’s Spring Forward event on Monday, CEO Tim Cook said that the company has sold 700 million iPhones since its launch.

Indeed, on Monday Apple unveiled plans to enter the field of healthcare, partnering with leading institutions around the world to design apps that would make it easier for patients to generate data that could be useful for medical researchers trying to find better ways to tackle diseases like Parkinson’s and asthma.