Alrighty, let me get a show of hands. How many of you have been paying attention to Apple's latest gadget releases? If you haven't heard, I covered the Apple announcement live on my site. Click here to see what Apple's latest tech announcements are.
One of the most anticipated new releases from Apple is the Apple Watch - no, it's not called the iWatch. The Apple Watch comes in three different styles. The basic design is called the Apple Watch, the sporty version is obviously the Apple Watch Sport, and the luxury style is the Apple Watch Edition. It's the Edition watch that's making headlines, and for several reasons.
While the base and Sport model of the Apple Watch are selling for $399-$549, the Edition model will blow you out of the water with a price tag of $10,000-$17,000! The Edition watch is made with 18-karat gold, but it turns out that Apple's gold isn't like other gold. It somehow managed an 18-karat rating while using less gold in its alloy than normal 18-karat gold.
Not only is the markup on the "gold" Apple Watch Edition absolutely insane (it has to be at least 354% if you were wondering, and is probably north of 500% all things considered), Apple's gold is likely worth a lot less than normal gold.
Technically, Apple's 18-karat gold in the Edition watch is rated as 18-karat gold, but only because of a weird chemistry loophole. Check this out.
As Dr. Drang of Leancrew.com wrote, Apple had filed a patent for a method of producing 18-karat gold that was both stronger than usual and used less actual gold by volume. [...]
The key thing to remember is that 18-karat gold is not 100 percent gold. It's an alloy, or mixture. Three-quarters of its mass must be made up of gold. The last quarter is typically made up of another metallic element. But, as Dr. Drang wrote, "Apple’s gold is a metal matrix composite, not a standard alloy. Instead of mixing the gold with silver, copper, or other metals to make it harder, Apple is mixing it with low-density ceramic particles."
Let's take a quick chemistry review; mass refers to the density of an object or element. These durable materials that Apple is using to mix with true gold take up more space than mass. Apple has created a new way to mix gold with other elements to make a technically correct 18-karat gold alloy, but it has less real gold in the alloy than standard 18-karat gold.
Still with me so far? In effect, this sneaky chemistry makes the "gold" on the Apple Watch Edition less valuable because it contains less real gold. It does make it more durable and able to stand up to wear and tear (those of you with gold jewelry can attest to this), but it also makes room for a huge profit margin.
What do you think about this? Is Apple just being sneaky about profits or is the tech giant simply making technological innovations that just happened to make it more money? Let me know in the comments below!