The Apple Watch is for Asia

Posted on March 12, 2015

Benedict Evans wrote a very apt article on the real benefit of Apple watch:

Apple is certainly trying something that’s new to both the tech industry and the luxury goods industry, but it’s not necessarily outside the bounds of (rich) consumer behaviour. If we only ever bought things that had rational use cases and the best value, we’d all be wearing boiler suits, or hoodies.

What Benedict didn’t mention was the importance of luxury in the Asian market. By having a very high-end model, Apple becomes the luxury player in the smart-watch and smart-phone arena. It makes it very hard for competitors such as Xiaomi to enter the high-end smartphone space as they will never be perceived as a brand with luxury kudos. They may have kudos in other areas, but not luxury. This will protect Apple’s market share and give them sustainable competitive advantage in a growing and increasingly important market.