If the Apple Watch Edition Sells Well, I Will Buy Apple Inc. Stock

By Markets Fool.com

Apple on Monday finally announced details of Apple Watch at its Spring Forward event. The company talked about the prices for the new wearable's various sizes and styles, and perhaps the biggest shocker was the pricing of the gold Apple Watch Edition.

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Apple has applied a starting price of $10,000 for a consumer electronics device that is bound to be obsolete within a year or two. The most expensive Apple Watch will sell for a cool $17,000. This is, in my view, absolutely crazy.

However, as fellow Fool Evan Niu pointed out in this excellent article, Apple is now "very much in the world of luxury fashion," and there are luxury watches priced at multiples of what the company is asking for the Apple Watch Edition.

That being said, if the Apple Watch Edition sells well, proving me wrong, then I will (while adhering to The Motley Fool's trading restrictions)take a meaningful position in Apple stock. Here's why.

If the Apple Watch Edition sells, then Apple's brand power is truly enormous
Apple is known to have a powerful brand. Its iPhones, iPads, and Macs are arguably the standard by which today's smartphones, tablets, and computers are measured. Part of this derives from the well-designed products themselves, but another big part is simply that the Apple brand is very strong in these markets.

If Apple can convince a significant number of consumers to buy a smartwatch made with a gold chassis and carrying a $10,000 starting price, then its brand power is truly the stuff of legends. And, as would be expected from the smart businesspeople at Apple, the company would likely further capitalize on that brand power.

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Take the Apple Watch as an example. Unlike traditional watches, which have done the same thing for ages (tell the time), Apple will cram more functionality and features into successive Apple Watch models. This means the $10,000-and-up Apple Watch Edition models will become obsolete within a few years.

Can you imagine a relatively sizable base of customers buying such an expensive device every two to three years? Actually, the kinds of folks who have the cash to drop $10,000 or more on a wrist-worn piece of technology might want to buy the latest each year.

The potential here, if the market for Apple Watch Edition proves sizable, is enormous.

Please define "sells well"
Allow me to clearly define what I mean by "sells well." If, during the July conference call -- by which point the Apple Watch will have been on sale for a full quarter -- management reveals that the company facessupply constraintswith the Apple Watch Edition, I will take that to mean the device is a success.

Yes, Apple did say at its event Monday that the Apple Watch Edition would be available in "limited quantities," so in theory my condition might be satisfied if the company just didn't make many of them. However, I'm going to give Apple the benefit of the doubt and assume it is making a reasonable quantity.

The article If the Apple Watch Edition Sells Well, I Will Buy Apple Inc. Stock originally appeared on Fool.com.

Ashraf Eassa has no position in any stocks mentioned, but if Apple can actually command five-figures for a piece of wrist-worn technology, then he'll be an Apple shareholder. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.