Tuesday, March 3, 2015

I disagree with IKN about Apple I-watches, but my post turns into vicious insults aimed at the WSJ

IKN - Wall Street Journal asks his opinion on something. Which tells you exactly how many gold market experts the WSJ has in their rolodex.


- Will Apple need 746 tons of gold per year?

No. See below.

- Will Apple be able to sell 1 million gold watches a month?

My opinion is no, nowhere near. The price point differential between a "normal" steel case ring and a gold one is going to be enormous, while the difference in functionality is zero. This isn't the market. We already see how gold iPhones/gold plated Samsungs etc etc designed for the rich in mind are ignored. The thing with phone tech /handheld tech etc is that once you have the top thing (let's say for argument's sake the best iPhone) very very few people are interested in an enhanced status symbol, even the megarich (who have their Ferrari parked outside, something that will make a better statement any day).
The act of status here will not be to wear gold Apple, it will be to wear Apple. There's no need to waste money on the superficial appearance.
My best guess on gold iWatch...and i mean most optimistic guess, is 50,000 units a month if AAPL does meet its market guesses and shifts 5m/month in total. It may well be less for the gold version, but I stress that I have no idea for overall sales figures apart from "Apple will sell oodles".

- Do you envisage any impact on the gold market from the Apple watch?

No, none The Rolex President Gold has:

Case ring 18.5 grams. Contains 13.875 grams of pure gold.
Case back 7.21 grams. Contains 5.41 grams of pure gold.
Bezel 5.3 grams. Contains 3.98 grams of pure gold
The bracelet 68.85 grams. Contains 51.64 grams of pure gold.
Total weight: 99.86 grams. Contains 74.905 grams of pure gold

That's a touch over* 2 1/2 ounces of gold. Have you seen one recently? You can see somebody wearing one of these things from two blocks away. If the Apple Gold gets to 15 g 24KT Au I'll be surprised. It's only going to be the case ring, perhaps the bezel. So, let's call it half an ounce and be generous. (note: one Troy ounce of gold has 31.1 grams).

Then "reports" have Apple estimating 20% of sales to be for the gold watch. On 5m units per month. Are these people out of their freakin brains? A million a month? If they shift 50k gold watches a month i'll be impressed (see above) but again to be generous, let's go for my 50k/month guess.

So, 293,000 ounces of gold a year. Or just over 9.1 metric tonnes. That's one medium sized gold mine's output in a year. Zero issues.

You know me, I disagreed a bit, so I just had to fire off an email to YKW, saying this:

If people do pay extra for the gold i-watch, that means they're buying a gold i-watch instead of a gold Patek Philippe watch. An important question is to what extent Apple would be able to generate new luxury demand out of thin air instead of just stealing share in the luxury watch market. Certainly an extra 1m luxury watches per month is a bit silly.

Then again, is Apple in the business of selling things at a ludicrous markup? Yes. And gold jewelry sells at a ludicrous markup to phyzz, more of a markup than anything else Apple can produce.

And is Apple in the business of giving their products transcendent status? Yes. And selling gold stuff means they leave Androids in the dust.

So I wouldn't put it past Apple to try their darndest to maximize gold sales. And remember, itunes was dumb and the ipod was dumb, all the way until Apple earnings eclipsed the GDP of sub-Saharan Africa.

Plus we should be pumping gold, not dissing it, bra!

Feel free to fwd my email to the WSJ, even though they're ignorant propagandizing Nazi cunts and I don't get ad revs anymore cos white-ass honky man can't handle my truth yo.

Point being, the numbers could indeed be silly (how many people do you know that have a reason to buy a gold I-watch for, say, $4000? Out of the 500 million people in the world who aren't living in tin-roofed shacks and pooping in a hole in the ground?), but I wouldn't put it past Apple to try. Because they're in the business of selling shit at a crazy markup and earning cachet, and a gold I-watch does both.

Also, Apple does not sell functionality! They sell overexpensive stuff that you just gotta own. Frankly, gold jewelry is a natural market for Apple, too bad they're such a huge company compared to the entirety of worldwide gold trade.

More importantly, the racist lying fascist dog-fucker scum at WSJ need to ask themselves why, if gold is just some stupid worthless metal, would an intelligent company like Apple want to use it to make watches? Sure, it's an awesome conductor and doesn't tarnish, but it's also just some stupid fucking throwback to a barbarian age, right? 

Why not make an I-watch out of T-bills? Or Swiss Francs?

Does this say something about the fundamental value of gold, y'think?

Wake up sheeple!

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