Apple (AAPL) CEO Tim Cook kicked off the festivities for the Apple watch on Monday by taking his time getting to the hotly anticipated new device on everyone's minds, eventually disclosing that the high-end gold model would start at $10,000.
Investors were unimpressed. Apple shares, which traded as high as $129.57 during the early portion of the event, closed at $127.14, up 0.4% on the day. Of course, stock market investors also shrugged off the iPhone and the iPad when they were introduced.
Cook didn't start touting the watch until after spending nearly an hour talking about the company's television, phone and Macintosh products.
“Apple watch is the most personal device we have ever created,” Cook said. “It’s not just with you. It’s on you.”
With the entry-level model starting at $349, a midtier watch with a stainless steel case will start at $549. Models with slightly larger screens will cost $50 more at both tiers. But the Apple Watch Edition with its 18-karat gold case will start at $10,000 when the watches arrive on April 24, Cook said.
After fewer than 5 million people bought smartwatch devices from competitors like Samsung Electronics (005930.KS) and Motorola last year, Apple’s formidable challenge now is to entice many millions to buy the watch this year.
Cook showed off several applications of the watch, including fitness tracking, displaying the text of emails and answering phone calls. "I have been wanting to do this since I was 5 years old," Cook said gleefully as he showed off the phone feature.
The emphasis was on saving time when vice president of technology Kevin Lynch followed Cook on stage to demonstrate third-party apps. "Using Apple Watch during the day is about brief interactions," he said.
Lynch showed an app from Starwood Hotels & Resorts (HOT) that allowed the user to bypass the check-in desk and use the watch as a key to open a hotel room door, for example. Lynch also used an app from Alarm.com to remotely open his garage door and ordered a ride via an Uber watch app.
But Apple had shown many of the watch features last September and the new information, even the prices, were not surprising, Jan Dawson, chief analyst at Jackdaw Research, said. Apple will likely dominate the market, with its combination of "technology chops and fashion and brand credibility," he said.
Apple had disclosed the entry-level watch price of $350 back in September, but left analysts and experts guessing about pricing for the rest of the line. Speculation about the high-end gold edition came fast and furious over the past few weeks, after reports it would exceed the $4,000 cost of Apple’s most expensive computer.
Guesses ranged from Citicorp analyst Jim Suva’s $950 at the low end to Piper Jaffray analyst Gene Munster picking $4,999, but it was longtime Apple watcher and blogger John Gruber’s estimate of $9,999 that was right on target. Competitors like Samsung, Pebble and Motorola have kept prices much lower, charging $100 to $400 for most models.
Apple investors also remain divided over just how many watches consumers are likely to buy. Manufacturers shipped just 4.6 million smartwatches and wearable bands worldwide last year, including 720,000 watches running Google’s (GOOGL) Android Wear and 1 million of Xiaomi’s low-priced Mi fitness bands, according to Canalys.
Prior to Monday's event, most analysts expected Apple would sell 15 million to 20 million watches at an average price of $350 to $400. For a company that had $200 billion of revenue last year, the potential for another $8 billion was a modest increase. But watch sales estimates ranged from as low as 6 million to 8 million to as high as 35 million to 40 million.
Before he got to the watch, Cook's first big reveal was a new HBO service on Apple TV that won't require a separate cable subscription. The much anticipated service, called HBO Now, will initially be exclusive to Apple starting in early April for $14.99 a month, HBO CEO Richard Pepler said in an appearance at the event.
Cook said Apple would cut the price of its Apple TV box to $69 from $99.
Apple executives also displayed a new, thin notebook computer. The updated Macbook weighs just 2 pounds and is only 13 millimeters thick at its thickest point.