The Apple Watch’s biggest advantage in China is deceptively simple: Few Chinese consumers laugh when Apple touts the device as a luxury item. Apple became China’s top luxury brand for 2015, outranking labels like Louis Vuitton and Gucci. More recently, Apple’s status has risen as Chinese consumers of luxury goods prioritize functionality over ostentatiousness—a taboo that China’s President Xi Jinping deplored as “unhealthy,” criticizing Chinese elites’ obsession with status symbols like Rolex watches. [...]
While Americans will compare the Apple Watch’s $349-$17,000 price tag to the cost of consumer electronics, Chinese consumers are more likely to stack it up against luxury timepieces. The worldwide median price of a luxury watch is about $10,700, according to DLG. That means the Apple Watch Sport (starting $349) and Apple Watch (starting $549) are inexpensive by comparison, while the gold and silver Apple Watch Edition models that start at $10,000 aren’t crazy purchases.
As an American, it's too easy to forget that there are other markets out there just as big as the United States. While the gold Apple Watch has been getting slammed here by the media, Tim Cook is keeping his eyes on the prize — China is a huge opportunity and a high priority for Apple.