John Gruber's initial thoughts and observations on Apple Watch

John Gruber has a well-thought-out post on Apple Watch. It's definitely worth reading. In his post, John spends some time ferreting out the value of a gold watch, both in terms of retail price as well as the cost of gold. I wasn't comfortable with his source on the latter that pegged the value of gold at $5,000-$6,000. Therefore, I decided to run some numbers.

Calculating the value of gold in a watch is fairly simple:

(spot price of gold per troy ounce / 31.1) x weight of gold in grams x fineness of gold = value

Today, the spot price is $1236 per troy ounce. We don't know the amount of gold in the Apple Watch models. The source John linked to states 150 grams for the Rolex, but I think that is too high. First, I've found other sources (such as this and this) that reference lower total amounts of gold in Rolex watches (surely it varies by model). Second, the bands for Apple Watch only contain a gold buckle. For the Rolex, the majority of the gold is in the band. Finally, unlike the Rolex, the back of the Apple Watch is not gold. I'll use 150 grams along with a variety of other weights. As for fineness, like the Rolex, the Apple Watch is 18k gold or .75 fineness.

Given those numbers, here are some values:

  • 150 grams of gold: (1236/31.1) x 150 x .75 = $4,471
  • 100 grams of gold: (1236/31.1) x 100 x .75 =  $2,980
  • 75 grams of gold: (1236/31.1) x 75 x .75 =  $2,235
  • 50 grams of gold: (1236/31.1) x 50 x .75 =  $1,490

The big variable is the actual weight of gold in Apple Watch. That said, the $5,000-$6,000 range is likely too high.