Apple To Buy One Third of World’s Gold Production for iWatch?
I think this one is a little misleading in the way that it makes it sound like Apple is going to grab up 1/3 of ALL the gold, instead of 1/3 of the annual production…which is still nothing to scoff at. It’s maybe also misleading on how much gold will go into an iWatch and how many gold ones they expect to sell.
What we see in the mining.com article is that it might be around two ounces of gold per watch and they’re expecting to sell about a million of the gold iWatches.
I think this is kind of interesting… Apple pretty much killed the wristwatch among the hoi polloi and now they’re going to bring it back with the iWatch to a generation who has largely gotten out of the wristwatch paradigm. Most people just look at their phones these days. Will adding some bells and whistles change things? I don’t know, Apple knows more about these things than I do and I think most people are willing to give their products a shot, considering their track record.
I have a female relative who is in her early/mid 20’s who said something about how she likes guys with wristwatches, like it makes them look sophisticated with that “classy cool” look. I think with men my age or maybe a little bit older, watches have been more or less a given, rather than a notable feature. I feel naked if I’m not wearing mine, with the exception of work or the gym.
Anyways, if the gold iWatch does take off, I see it creating a larger luxury watch market rather than competing with the current (Rolex, Movado, etc) cast of characters. Although I doubt Apple is going to grab up THAT much of the world’s gold production, it may make a notable dent in it. The article says that they expect Asia to be the big market for these watches, and I can totally see that given their love of gold, gadgets and the prestige that something like this would carry. What young hot-shot in Singapore, Shanghai or Taipei wouldn’t want one of these??? They’re more likely to be a hit with affluent younger people that have the money but don’t have the generational affinity for the luxury watch.
The world’s gold supply is still fairly consistent, and the bottom line is that a product like this would cause a spike in demand for gold while Apple ramps up production on these bad boys and send the price of gold up with it. I guess we’ll wait and see if Apple makes a move into gold right now while the prices have been beat up.
As far as me, I’m curious to see the iWatch but I don’t see myself getting one. I have a 15 year old Seiko that I’ve been wearing and that’s good enough for me. Hell, I don’t even have a smart phone so I figure I’d jump that hurdle first before I worry about a space-age watch, gold or otherwise.
Can this have the potential to be a “black swan” if Apple really flops on this? I don’t know. I guess we’ll see how this all pans out…