Apple's $10,000 watch....

Apple now has a $10,000 watch that is identical to the normal watch but is gold plated.

The article states that this may be the first attempt for Apple to become a luxury good. Here are my

thoughts.

First, Apple is already a luxury good. You can get better performance and price from competitors.

Second, Apple probably created the $10,000 watches to make the normal Apple watch look extremely cheap ($549).
Firms often create these super expensive luxurious products to make their other products, a bargain.
That is why often you see diamond plated phones and other types of weird luxuries.  Yup, after seeing $10,000 price tag, $549 is cheap.

Third, it is possible that Apple is trying to price discriminate its customers. Everyone loves Apple because it is a life style, a choice. The rich, the poor all love apple. So Apple realized that a quick way to price discriminate would be to create this super expensive watch (traditionally watches are luxury goods) and then who is willing to pay. Apple will gather the information of those who buy $10,000 watches and sell even more luxurious goods, including gold plated MacBooks, diamond earphones....

Oh,  quick psychology research note. $549 (Apple Watch) and $1299 (MacBook) end in 9 to attenuate the sticker shock ($550 vs. $549) since we care most about the left digits (left digit effect), 54 is much better than 55.

In contrast, luxury goods tend to have '0" as the end digit to distinguish itself from bargains, therefore the $10,000.

In sum, Apple watches are expensive but since Apple is a life style and Apple is superb at marketing, Apple stock will do well.

Update:
Bloomberg discusses who is going to buy the watches...Yes, the rich Chinese will buy them...but I doubt it will catch on as a luxury...unless Apple decides to upgrade the watches for free every year :p