Here’s to the crazy ones: Apple Watch Edition

If you’re planning on buying a gold Apple Watch Edition, you either have to be rich or crazy. Preferably, a bit of both.

With a starting price of $10,000 and rapidly going up to $17,000, this is not something you buy because you’re lusting after Apple’s latest gadget. If it’s the technology you want, even the cheapest Apple Watch will do. The truth is every Apple Watch has identical internal components and an identical face. There is not one thing you can do with a gold Apple Watch — other than admire its color — that you can’t do with the considerably cheaper ($350-$1100) other models.

So who will — or who should — consider buying a gold Apple Watch?

 

Rolex

To answer that question, first let’s ask a more general one: Why buy any expensive luxury watch?

First off, it’s clear there is a market for these watches. Let’s take Rolex for example. These watches come in a range of models and prices, with a likely median around $10,000. Despite the low oxygen levels at these altitudes, estimates I have read indicate that Rolex sells several hundred thousand watches each year!

Admittedly, that number is not impressive in comparison to something like iPhone sales. But no one expects that level of sales for a luxury item. It’s a successful niche market, much like the one for luxury cars.

So who are these people? It obviously helps to be rich. If you have enough money that $10K for you is like $100 for the rest of us, you can buy a Rolex and not care what it costs. But you don’t have to be that rich to justify a luxury watch. People who are merely well-off (but far from the top 1%) might decide to splurge on one. Such people might spend upwards of $10,000 on a big vacation, for example. They could decide they’d rather have a Rolex and skip the vacation. For what it’s worth, I fit comfortably into this category. I’m certainly not a member of the super-rich, but I could buy a Rolex tomorrow without experiencing any financial strain.

But I wouldn’t do so — because I don’t place any value on having such an expensive timepiece. I can get an attractive watch that’s well built and keeps accurate time for far less money. And that’s all I want or need. I’d almost be afraid to wear a Rolex, for fear it would get lost or stolen.

Still, I can imagine at least four rationales for someone else opting to buy a luxury watch:

Materials. The metal is solid gold. And that costs big bucks. If you are into gold jewelry, this may be where you want your discretionary income to go.

• Craftsmanship. As this website explains, Rolex watches are not stamped out like the ones you buy at Target. If you value the care that goes into making a fine watch, you may want a Rolex.

Status. Like Gucci or Prada, Rolex is a status brand name. People are willing to pay extra to obtain that status. A lot extra.

Longevity. Luxury watches are designed to last. They can become heirlooms that get passed down for generations. Amortized over such a long period of time, $10K may not wind up being so expensive. And if you ever decide to sell, a “used” Rolex will likely retain a good portion of its value.

Apple Watch Edition

Okay. Now that we’ve cleared that up, let’s return to the original question: Why spend $10K or more to get a luxury version of the Apple Watch?

Again, if you’re so wealthy that cost is irrelevant, there’s no point in asking this question. So let’s eliminate these people from the discussion. What about the rest?

For the rest, I simply can’t see a good case for getting one. That’s why I say you have to be a bit crazy to buy a gold Apple Watch.

Of the four rationales I cited above, only one clearly applies to the Apple Watch Edition: Materials. It’s made out of gold. That’s it.

As for craftsmanship, as I already said, the Watch itself is identical no matter which one you get. Actually, at its Media Event, Apple made a bigger deal about the craftsmanship that went into the aluminum and stainless steel models (with videos about each one) than the gold model.

As for status, I don’t anticipate any great status in wearing an Apple Watch Edition. To the contrary, I can imagine people discreetly scoffing at the wearer, thinking how foolish for the person to believe that the Apple Watch is commensurate with a Rolex as a status symbol.

As for longevity, that’s the worst rationale of all. The Apple Watch is not designed to get passed on to heirs. Far from it. It’s not even designed to keep it yourself for more than about 5 years. Think about it a moment. The original iPhone came out in 2007. I bet there aren’t 10 people on the planet that are still using one as their primary smartphone. I expect the technology of the Apple Watch to advance at a similar pace. A few years from now, when Apple Watch 4 is out, the one you might buy next month will be hopelessly obsolete, almost archaic. This means you will almost be required to get a new one. It also means that the resale value of your old watch will have plummeted.

Paying $10K for a watch once is one thing. Paying it again and again every few years is something else entirely.

There is one silver (gold?) lining here. I suspect that you will be able to re-use your original band when you upgrade to a new version of the Watch (at least until Apple completely redesigns the form factor). Ideally, you will also be able to buy a Watch without a band. This will save you considerable money. But it will still be ridiculously expensive to upgrade.

To be fair, Apple isn’t planning on selling many of these gold watches. Tim Cook announced at the media event that they will have only “limited availability.” Wise decision.

Bottom line: Unless you are rich and crazy, and assuming you want an Apple Watch at all, stick with the cheaper Apple Watches this year. This is especially so when it isn’t yet clear how compelling the product will be or how much you will value it. If you wind up loving the watch, and you have the cash to spare, you can always go for the gold Apple Watch next year.

Note: The only person I know who owns a Rolex is Dave Hamilton — and I just saw that he posted his own similar thoughts on the gold Apple Watch.

Putting it together: MacBook, USB-C and the iPad Pro

Apple’s new MacBook made an impressive debut at yesterday’s Apple Media Event. With features such as a 2304 x 1440 Retina display, Force Touch trackpad, and fanless design, it lives up to Apple’s billing as an innovative “reinvention” of a state-of-the-art laptop computer.

Still, despite dropping the Air suffix from its name, the new 12-inch laptop is a very close relative of the Air — both in appearance and target audience. On the other hand, the MacBook is so light (just two pounds) and so thin (24% thinner than an 11-inch MacBook Air) that its truest competitor may turn out to be the iPad Air rather than the MacBook Air.

Reinforcing this iPad matchup, the new MacBook comes in the same assortment of three colors (silver, space gray and gold) as do Apple’s iPads. And (as with all iOS devices and unlike Apple’s other laptops), the new Macbook has no custom configuration options.

USB-C

There’s one more iPad similarity. And it’s a big one: The MacBook has only one port for wired connections (not counting an audio-out jack)! Really. Just one. That’s down from four (2 USB, 1 Thunderbolt, and a power port) in the MacBook Air. The new port even looks like an iOS Lightning port. But it’s not. It’s an entirely new, never-before-seen-on-an-Apple-device port called USB-C. This USB-C connection supports charging, USB 3.1 Gen 1 and DisplayPort 1.2. It does it all, as they say.

My first reaction to this news was: “What? Only one? Even if Apple wanted just one type of port, couldn’t they at least have included two of them?” That way you could charge a MacBook and have an external drive attached at the same time. As it now stands, unless you get an inevitable third-party USB-C hub, you can only do one of these things at a time.

And no Thunderbolt? This means you can’t connect a MacBook to Apple’s Thunderbolt display — an option that had been strongly promoted by Apple just a couple of year’s ago.

I was ready to conclude this whole USB-C thing was a serious misstep on Apple’s part. And it may yet prove to be so. But, more likely, it is Apple once again staying ahead of the curve, pushing the envelope, or whatever similar analogy you prefer. Remember when the iMac first came out, without any floppy drive? People said it was a huge mistake. But it turned out to be prescient. This is Apple doing the same thing.

First, given the target audience for this Mac, which is the low end of the market, the limitations of a lone USB-C port are likely to be less than they may appear. For example, prospective MacBook owners are not the sort to purchase a Thunderbolt Display. That’s more for the MacBook Pro crowd.

More importantly, with the new MacBook, Apple is pushing us towards a world when all connections will be wireless — either to other local wireless devices or over the Internet to the cloud. Want to back up your MacBook? Connect it wirelessly to a Time Capsule. Want a larger display? Use AirPlay to mirror your display to a television. Want to store your super-large music and photo libraries? Use iCloud.

iPad Pro?

Let’s return to the iPad/MacBook similarity. Rumors continue to circulate that Apple will be releasing a 12-inch iPad Pro later this year. Does such a device still make sense, given the arrival of this new MacBook?

Personally, I much prefer an iPad to a laptop for many tasks. There are many times when I find iOS apps and a touchscreen more convenient and more practical than Mac app alternatives and an intrusive physical keyboard. Want to read the New York Times, check the weather, read a Kindle book, play a game, listen to a podcast? The iPad is the better choice. When I am home, I use my iPad Air almost exclusively, while my MacBook Pro gathers dust (I have a desktop Mac for tasks that the Air doesn’t handle well).

The iPad Air also beats even this latest MacBook in terms of weight and size — by a wide margin: the iPad is half the weight and almost half the thickness of the MacBook.

Overall, I don’t see the new MacBook significantly affecting sales of the iPad Air or mini.

A supposed iPad Pro is a different story. An iPad Pro will presumably be targeted for “productivity” tasks that are the traditional domain of laptops — tasks where you typically prefer a physical keyboard. The new MacBook will give an iPad Pro a run for its money here. Even if you could “get by” with just an iPad Pro, a MacBook (with the more powerful and flexible OS X) will be the better choice for getting work done.

Bottom line: Many people will still prefer to own some combination of iOS device(s) and Mac(s). I certainly will. But it’s hard to imagine users opting for both a new MacBook and an iPad Pro. It will be one or the other. And the new MacBook is more likely to be the winner. That’s why I am beginning to have serious doubts about the viability of an iPad Pro. The new MacBook may kill the device before it’s even born.

One final thought: If an iPad Pro is coming…might it come with a USB-C port instead of (or more likely in addition to) a Lightning port? If so, this would allow the Pro to offer an assortment of productivity options not currently possible with existing iPads.

Apple’s hardware announcements: How odd

My reaction to the new hardware announced at today’s Apple media event was hardly a typical one. “How odd” pretty much sums it up. How so?

• Apple introduces the iPad Air 2. The first thing Apple wants you to know about the new iPad Air 2 is that it’s slightly thinner than last year’s model. At some point, increased thinness starts having diminishing returns. For me, we are now at that point. Last year’s Air is already thin enough. So I didn’t get excited by the .05 inches Apple managed to cut off.

Beyond that, the new Air’s dimensions and design are exactly the same as the previous model. Oh, it comes in gold, if that’s of any interest to you.

The new Air has an improved camera (8MP instead of 5MP). However, given that I never take photos with my iPad (I use my iPhone instead), this matters not at all to me.

The new Air has an improved “fused” display, 802.11ac support, a faster processor, TouchID and Apple Pay support. The cellular version also comes with a new Apple SIM that allows you to switch carriers whenever you want without needing to change SIMs. These are welcome additions, and they save the iPad from the doldrums I’ve just described. The end result is that the new iPad emerges as a significant upgrade. It’s not a major overhaul, but you can’t expect Apple to do that every year.

Overall, I don’t see the new iPad as a big enough change to justify upgrading from a prior iPad Air for most people. If you have a pre-Air iPad, or no iPad at all, that’s another story. The upgrade is definitely attractive. Kudos to Apple here.

By itself, we’re not yet in truly “odd” territory, but we’re just getting started.

• Apple announces the not-so-new iPad mini 3. Last year, the only difference in specs between the iPad Air and the iPad mini was the display size. Every other feature was identical. This meant, in deciding which model you preferred, all you had to consider was how big an iPad you wanted. This parity was greeted with unanimous praise by iPad owners.

That’s why it’s odd that Apple abandoned this parity with the new mini. The iPad mini 3 adds TouchID, Apple Pay support and the gold color option. As far as I can tell, that’s it. In every other way, including thinness, it remains the same as last year’s model.

• Apple keeps older models in the lineup. Apple has a history of maintaining older iPhones and iPads when a new model comes out. This allows it to offer lower price point models for those who shop primarily based on cost.

So it wasn’t odd to see Apple do that again this time around. But Apple has gone beyond its usual limits. You can now get last year’s iPad Air, last year’s iPad mini and even the original iPad mini from 2 years ago. This means Apple’s current iPad line-up includes 2 new models and three older ones. And among the two newer ones, only one (the Air) is significantly new. Very odd.

• 16 GB iPads. The storage on the new iPads follows the pattern of the iPhone 6 models: an entry-level 16GB model which bumps up to 64GB for $100 more. I really don’t see why Apple continues to sell the 16GB model. Given that, until this year, Apple has always offered double the storage for each $100 extra, why not start with 32GB? My cynical guess is that Apple expects most people to go for the 64GB model, making more money for Apple than if they had gotten a cheaper 32GB device. Obviously, Apple has not confirmed my speculation. Still, I find it all a bit odd.

[Note: You can compare the specs of all the iPad models here.]

• The Mac mini gets an uninspired upgrade. Apple introduced an entirely new line-up of Mac minis today. While it’s great to see support for Thunderbolt 2 and upgraded processors, this is not the Mac mini I was hoping for.

The top-of-the-line specs for the Mac mini still do not attain the levels available in the iMac. There seems no reason Apple could not do this. But they don’t. The internals of the mini are more like a MacBook than a desktop Mac.

If you were hoping that the Mac mini might evolve into a scaled-down cheaper alternative to the Mac Pro, for people who prefer a “headless” Mac, forget it. As Phil Schiller indicated at the event, Apple views the mini as a very low end model, targeted to first time Mac buyers or to those who want a server for a modest home network.

• Apple introduces the iMac with Retina display. This is the big one I was waiting for: a 27-inch iMac with a Retina display — a 5K display with 4x as many pixels as you get with a 4K television. Whoa!

It starts at $2499. Expensive. But considering what you get with it, that’s quite reasonable. As Apple points out, a comparable stand-alone display could cost $3000 — and that doesn’t include a computer! I expect to buy one in the coming months.

What’s a bit odd here is not the new iMac itself but that it’s the only new or upgraded iMac in the lineup. Apple continues to sell the same 21.5- and 27-inch iMacs from last year. There is no 21.5- or 24-inch Retina display model.

This is similar to what Apple did when it first introduced the MacBook Pro with Retina display. If Apple follows the same pattern here, we can expect to see an “all-Retina” iMac lineup within a year or so. Still, taken together with the new iPad line-up, I can’t recall a time when Apple continued to sell so many versions of older hardware, after new models were announced. Odd.

• No stand-alone Retina 5K display is announced. Apple did not announce a stand-alone 5K Retina display. I have read speculation that this is because current Mac hardware could not drive the display through a Thunderbolt port; it needs the custom direct connection of the iMac. This may be so.

Regardless, this means that Mac Pro users, despite having Apple’s most expensive and powerful machine, cannot get an Apple display that matches what is available with the iMac. Odd. Perhaps it too will come next year.

• Yosemite and iOS 8.1 arrive. Nothing especially new here. Apple had already announced the specs back in June at WWDC and in last month’s iPhone event. Still, it’s good to see that the OS versions are finally live (or will be by next week) — as are Apple Pay and new versions of iWork apps.

Personally, I find the new OS versions much more exciting than the new hardware announced today. I especially look forward to using iCloud Drive and other Continuity features, now that both iOS 8 and OS X Yosemite are out.

• The long view. More than anything else, I’m struck with how, despite the new iPads and iMac announced today, Apple kept older models in its lineups. I’m not sure what this means from a “big picture” perspective, but it certainly suggests that Apple is less motivated to push an out-with-the-old-in-with-the-new marketing approach than it has in the past. When you consider that the remaining iMacs are basically 2012 models, Apple is sticking with “old” for an especially long time.

Perhaps we’ve gotten to a plateau where significant hardware advances don’t happen every year or two anymore. So major new hardware is not possible on an annual or even biannual basis. If so, Apple’s marketing has clearly adjusted to this new reality.

As for the new hardware: the iPad Air 2 is a worthy update; the iMac with Retina display is truly ground-breaking. As for the rest, it still strikes me as odd. Perhaps, in a few days, I’ll shake that feeling. But that’s where I am for now.

The myth that AppleCare+ is worth it

[Note: See also my latest (April 2016) take on this subject: Why AppleCare+ is still not worth it.]

Back in 2006, I advised against getting AppleCare for your Mac, arguing that the odds that it would save you money were too low to make it worth buying. In 2011, I reached the same negative conclusion regarding AppleCare+ for iOS devices.

While I thought I had built a pretty air-tight case, there are apparently still people who remain unconvinced. The myth persists that AppleCare is worth getting. As one recent example, a Cult of Mac column, discussing AppleCare for the iPhone 6 and 6 Plus, stated: “AppleCare+ should be strongly considered for those devices.”

Had something changed since 2011? I decided to take a closer look. I found that nothing had changed. Except for a few rare circumstances, AppleCare+ remains as bad a deal as it ever was.

To see why, let’s look at exactly what AppleCare+ covers. AppleCare+ for an iPhone 6 offers two years of coverage for $99. For the moment, let’s ignore accident protection and just examine the basic coverage.

Basic coverage

The most critical point to grasp is that AppleCare’s coverage is very limited. You don’t even have a chance of saving money with AppleCare except during a relatively narrow window.

Basic AppleCare only covers things that are not your fault, such as failures due to manufacturing defects. One year of this same basic coverage is included free with each iPhone.

This means, for covered service issues, purchasing AppleCare+ is a complete waste of money for the first year.

Further, most things that go wrong with an electronic device due to manufacturing defects and such tend to happen within the first year. This means that the second year of coverage is not likely to be of much value either. And if you happen to be someone who gets a new iPhone every year, selling or trading in the old one, the second year of coverage is entirely irrelevant.

By the third year, you have to pay for any repairs, whether or not you purchased AppleCare+. Once again, having AppleCare+ becomes worthless at this point.

In other words, the only time that AppleCare+ can be of any help here (and it’s a low chance) is during the 12 month interval between one and two years after you purchase the iPhone.

Even if something does go wrong during this second year, it still may work out to your disadvantage to have paid for AppleCare+. For example, if your iPhone 6 battery dies, you can get a new one for free with AppleCare+. Without AppleCare+, it will cost you $79. This means that, should this turn out to be the only time you need AppleCare+, you will have paid $20 more for the replacement battery by getting AppleCare+ than if you had foregone the coverage.

From a probability perspective, I can’t see any way to argue that AppleCare+ is likely to pay off for basic coverage.

Accident protection

AppleCare+ offers one additional benefit: you get two years protection against “accidental damage.” This is protection that the one year free warranty does to cover at all. As such, people who favor AppleCare+ typically cite this as the key reason to buy it.

However, if you take a closer look, you’ll find that even the accidental damage protection is not likely to work to your advantage.

First, bear in mind that “accidental damage” does not cover a lost or stolen iPhone. You are still on your own if either of these things happen.

Second, each accident incident (and you are limited to a maximum of two) will cost you an additional $79. So, for example, if you need to replace a shattered screen it will cost you $79 if you have AppleCare+. Without AppleCare+, replacing the screen of an iPhone 6 will cost you $109 (for the 6 Plus, it’s $129). In other words, getting AppleCare+ for an iPhone 6 would only save you $30 here (and that’s not counting the $99 you paid to get AppleCare+ in the first place). To me, that’s not enough incentive to make it worth shelling out $99 for AppleCare+ — money that you will never recoup if nothing goes wrong with your iPhone.

However, if you don’t have AppleCare+ and you need to entirely replace your iPhone 6, it will cost you $299 ($329 for an iPhone 6 Plus). At last, here is a case where it seems you can save significant money if you purchased AppleCare+. It is this scenario that leads to online postings such as:

“I dropped my iPhone the other day and it completely broke. I needed to get the phone replaced. Because I had AppleCare+ coverage, it only cost me $79. I would have had to pay $329 otherwise. I’m so glad I had AppleCare. Definitely worth it. Highly recommend everyone getting it.”

First off, the person glosses over the fact that they also had to pay $99 to get AppleCare+. But let’s ignore this for now. The larger problem with such postings is that they are anecdotal. As I pointed out previously, anecdotal evidence by itself is essentially worthless. That’s because, for every anecdote supporting one point of view, someone can come up with a counter-anecdote that supports the other position.

For example, take my own situation. I have owned 8 iPhones. I started with the original iPhone in 2007 and have gotten a new one every year since (the older one transfers to my wife). I never purchased AppleCare for any of them. Only one of the phones ever needed an out-of-warranty repair — and that occurred after the device was more than two years old. Had I purchased AppleCare at the current $99 price for all of these phones, I would now be almost $800 in the hole. Clearly not worth it.

Actually, if the person quoted above had considered all of their iPhone purchases (as I did), they too might have come to my conclusion. For example, if this was their fourth iPhone and the first time they needed a replacement or any other repair, they would have spent $479 to save $329. Looking only at your most recent purchase (or any single purchase among many that you have made) gives a potentially false picture.

But let’s not place any more value on my negative experience than on someone else’s positive one. As isolated anecdotes, they are both useless as a means of helping you decide whether or not you should buy AppleCare.

What would help is some sort of experiment — such as picking 1000 iPhone owners at random and following them for four years — and seeing whether or not AppleCare+ would have saved or cost money in each case. In the absence of such data, what other options do you have for making an intelligent decision? Here’s what I would recommend:

• Assess the likelihood that you will damage your iPhone

Some people are more clumsy or careless or rough with their phones than are others. Are you the sort that frequently drops your iPhone? Or has that never happened? If you’ve owned smartphones for several years, consider your track record. Have you needed to replace a damaged phone once a year or so? Or have you never needed a replacement? If you find yourself on the “bad” end of this spectrum, perhaps you should get AppleCare+.

• Assess your finances

If you needed to pay $329 to replace your iPhone 6 Plus tomorrow, could you afford to do so? Or would you possibly have to forgo having a phone at all? If it’s the latter, perhaps it’s worth the peace of mind to get AppleCare+.

However, bear in mind that, by getting AppleCare+, it will still cost you $178 ($99 + $79) to replace a broken iPhone. In the long run, I would argue that you’re more likely better off putting the $99 in a bank account each time you buy a new iPhone, saving the money to cover the cost of a possible replacement phone down the road.

So where does all this leave you?

Getting AppleCare+ for any reason other than accident protection is definitely not worth it. As for accident protection, if neither of the above two assessments tilt clearly towards getting AppleCare+ (and I suspect that it won’t tilt that way for most iPhone users), then I would still strongly advise against getting AppleCare+. Remember: this is a probability assessment, not a guarantee. AppleCare+ could still save you money in some unlucky circumstances — but the odds are against it.

Bottom line? For the vast majority of iPhone owners, AppleCare+ remains “a sucker’s bet.”