Apple’s decision to lower the price of the Apple Watch Series 3 model to just $199 could have a significant impact on sales and Apple Watch adoption, according to tech analysts.
As well as lifting the lid on an all-new Apple Watch Series 5 with an always-on display and built-in compass, Apple also revealed that the Apple Watch Series 3 would remain in the Apple Watch lineup, priced at just $199 – significantly more affordable than the $399 or $499 Apple Watch Series 5 smartwatch.
Last year, the Series 3 model started at $279, and so by reducing the price of the entry-level Apple Watch, the company is now able to appease price-conscious customers.
Its pricing structure now falls in line with the iPhone – Apple still sells the iPhone 8 at a reduced price.
Speaking to CNN, Canalys analyst Ben Stanton said: “Apple does loosely base its pricing on the cost of producing a device, but it is more about the price a consumer is willing to pay.
“A cheap price point for Apple Watch is important because a lot of the device’s growth right now is coming from consumers who have never owned Apple Watch before.
“It is trying, and it seems succeeding, to appeal to different demographics with different devices and price points.”
Whilst the Apple Watch Series 3 is now two years old, it’s virtually the same as the Apple Watch Series 5, albeit with a larger form factor and fewer new features such as an always-on display – for everyday users, however, these features aren’t necessarily important.
Apple killed off its Series 4 model at its event to help differentiate between the “affordable” Series 3 model and the Series 5, which also offers better battery life and Apple Maps tools.
Ramon Llamas, a research director at market data firm IDC, added that the “lower price Apple Watch 3 is a gateway to get people to commit. Comparatively speaking, you are paying 50% less than a new model — a cost that is a lot easier to swallow.”
Last year, Apple sold 23.3 million units, and that figure is expected to climb to 25.9 million this year with the introduction of the Series 5 and now the cheaper Apple Watch Series 3.
“It is strange to think that there are brand new users out there waiting, considering it has been more than four years since the first one launched,” Stanton added.
“Apple Watch was a very slow starter, in comparison to its recent sales, but this may be a unique characteristic of wearable technology. The more people who wear it, the more potential customers will see it.”
“Apple’s strategy for the Watch is evolving in an interesting way,” the analyst added. “It used to be about fitness with running, cycling or swimming, but now it is extending into wellness. It started this effort with features like guided breathing, but now its newest tools, such as noise-level tracking and menstrual cycle tracking, really take this focus on wellness to a new level.”
Are you excited to see Apple bring down the price of the Apple Watch? Does it make you more likely to buy your first smartwatch or upgrade an existing one? Let us know over on Twitter and check back soon for more Apple news and rumors, as and when we get them.