Wearables for Apple, Only Time Will Tell in China

Written by Tim Higgins Courtesy Bloomberg BusinessWeek on . Posted in Luxury Products & Trends

After Apple showcased its slate of iPhone-linked smart watches in March, it was clear that plenty of early adopters would buy basic versions priced at $350 and $550. The big question was, who on earth is going to buy the Apple Watch Edition for $10,000 and up? After all, lots of Apple devices get tossed aside every time the company comes out with the Next Big Thing.

For those sitting in the auditorium in San Francisco for the press conference, it seemed clear what Apple hopes the answer will be: the Chinese.

Leading up to chief executive officer Tim Cook’s presentation, the company showed a video of a newly opened Apple Store in the eastern Chinese city of Hangzhou, home to Alibaba. When presenters began listing the apps that will work smoothly on Apple watches, front and centre was WeChat, the Chinese messaging service with more than 500 million users. All of this after Apple made sure the watch’s magazine cover debut was a fashion shoot for China Vogue.

The watch will go on sale in China on 24 April, the same day as its US rollout. There, the priciest version of the gold Edition will run 126,800 yuan ($20,264). “They get where this is going,” says Ben Bajarin, an analyst for consultant Creative Strategies. “China, if not their biggest market, will be their most important.”

The past quarter has been particularly good to Apple in China, where the success of the iPhone 6 and 6 Plus helped boost its revenue 70 per cent and put it atop China’s smartphone sales charts for the first time, according to Canalys data. Cook said in 2013 that he expects China eventually to overtake the US as Apple’s largest market. Greater China contributed more than $16 billion to Apple’s sales during the holiday season, about one-fifth of its total haul.

China’s prominent role in the Apple Watch presentation is a sign that Cook’s strategy to top the company’s $182 billion in 2014 revenue this year hinges in large part on the world’s second-largest economy. The country accounts for one-third of the global market for luxury goods, according to Bain. Although Apple’s gold smart watch isn’t expected to be a large seller—Piper Jaffray analyst Gene Munster estimates it’ll account for 10,000 of the first 8 million in the company’s smart watch sales—a strong showing by gold-coloured iPhones in China suggests that real gold will do even better there, says Chris Jones, an analyst at Canalys. “An international brand, plus add gold into the equation,” he says. “I think that combination is going to appeal in China.”

Apple opened six stores in China in the six weeks before the 9 March press conference, including the one in Hangzhou, bringing the total to 21. The company has said it plans to have 40 stores in the country by the middle of 2016.

In China, perhaps even more than the US, Apple will have to prove itself as a luxury watchmaker, says Tom Doctoroff, head of J. Walter Thompson’s Asia Pacific arm and author of What Chinese Want. In a market where luxury cars are seen as coming from Germany and fine wines from France, Doctoroff says, smart watches will have a tough time dislodging Rolex. “Generating face, or social currency, requires instant telegraphing,” he says. “The Apple Watch will compete with expensive watches that project identity in a rather immediate way. Even though Apple is creating the gold-cased Edition, this will be faux luxury to elite Chinese.”

A quick survey of shoppers perusing watches in Beijing on 10 March suggests that Apple has work to do before it starts shipping its gold to China. Chen Zhiting, a 55-year-old retired commodities broker, was looking to buy what he called a “sporty” watch for as much as $8,000, but the 18-karat Edition wasn’t on his radar. “Does Apple make watches?” Chen asked.  “I thought they were the iPad people.” 

- See more at: http://businessweekme.com/Bloomberg/newsmid/190/newsid/555#sthash.8TiZd2m6.dpuAfter Apple showcased its slate of iPhone-linked smart watches in March, it was clear that plenty of early adopters would buy basic versions priced at $350 and $550. The big question was, who on earth is going to buy the Apple Watch Edition for $10,000 and up? After all, lots of Apple devices get tossed aside every time the company comes out with the Next Big Thing.

For those sitting in the auditorium in San Francisco for the press conference, it seemed clear what Apple hopes the answer will be: the Chinese.

Leading up to chief executive officer Tim Cook’s presentation, the company showed a video of a newly opened Apple Store in the eastern Chinese city of Hangzhou, home to Alibaba. When presenters began listing the apps that will work smoothly on Apple watches, front and centre was WeChat, the Chinese messaging service with more than 500 million users. All of this after Apple made sure the watch’s magazine cover debut was a fashion shoot for China Vogue.

The watch will go on sale in China on 24 April, the same day as its US rollout. There, the priciest version of the gold Edition will run 126,800 yuan ($20,264). “They get where this is going,” says Ben Bajarin, an analyst for consultant Creative Strategies. “China, if not their biggest market, will be their most important.”

The past quarter has been particularly good to Apple in China, where the success of the iPhone 6 and 6 Plus helped boost its revenue 70 per cent and put it atop China’s smartphone sales charts for the first time, according to Canalys data. Cook said in 2013 that he expects China eventually to overtake the US as Apple’s largest market. Greater China contributed more than $16 billion to Apple’s sales during the holiday season, about one-fifth of its total haul.

China’s prominent role in the Apple Watch presentation is a sign that Cook’s strategy to top the company’s $182 billion in 2014 revenue this year hinges in large part on the world’s second-largest economy. The country accounts for one-third of the global market for luxury goods, according to Bain. Although Apple’s gold smart watch isn’t expected to be a large seller—Piper Jaffray analyst Gene Munster estimates it’ll account for 10,000 of the first 8 million in the company’s smart watch sales—a strong showing by gold-coloured iPhones in China suggests that real gold will do even better there, says Chris Jones, an analyst at Canalys. “An international brand, plus add gold into the equation,” he says. “I think that combination is going to appeal in China.”

Apple opened six stores in China in the six weeks before the 9 March press conference, including the one in Hangzhou, bringing the total to 21. The company has said it plans to have 40 stores in the country by the middle of 2016.

In China, perhaps even more than the US, Apple will have to prove itself as a luxury watchmaker, says Tom Doctoroff, head of J. Walter Thompson’s Asia Pacific arm and author of What Chinese Want. In a market where luxury cars are seen as coming from Germany and fine wines from France, Doctoroff says, smart watches will have a tough time dislodging Rolex. “Generating face, or social currency, requires instant telegraphing,” he says. “The Apple Watch will compete with expensive watches that project identity in a rather immediate way. Even though Apple is creating the gold-cased Edition, this will be faux luxury to elite Chinese.”

A quick survey of shoppers perusing watches in Beijing on 10 March suggests that Apple has work to do before it starts shipping its gold to China. Chen Zhiting, a 55-year-old retired commodities broker, was looking to buy what he called a “sporty” watch for as much as $8,000, but the 18-karat Edition wasn’t on his radar. “Does Apple make watches?” Chen asked.  “I thought they were the iPad people.”

After Apple showcased its slate of iPhone-linked smart watches in March, it was clear that plenty of early adopters would buy basic versions priced at $350 and $550. The big question was, who on earth is going to buy the Apple Watch Edition for $10,000 and up?

8 top tips for a successful weekend in London

Written by Olivier Templar-James Courtesy A Luxury Travel Blog on . Posted in Luxury Travel & Lifestyle

London is a large, exciting, multi-cultural and cosmopolitan city where everything is possible. Seizing the spirit and experiencing all that it has to offer in a single weekend might seem like quite a challenge, but we came up with a selection of the best things to do while in London.

Apple Watch Ladders Up Luxury Branding

Written by Patrick Hanlon Courtesy Forbes on . Posted in Luxury Business News

Last year, Apple lured Angela Ahrendts away from luxury fashion brand Burberry to become its retail chief. That lure was a package valued at $73.4 million (about half of that compensated her for stock vesting she left behind at Burberry).