Of all the announcements at yesterday’s Apple keynote, the one that really caught my attention was the one Tim Cook slipped under the radar: the 18 Karat Gold Apple Watch will cost $10k.

Ten. THOUSAND. Dollars.

Not only does this make it the most expensive Apple Watch, this makes it the most expensive Apple product.


How could Apple have the nerve to justify this ridiculous $10,000 price tag?

  1. Apple understands the 80/20 rule, and
  2. Apple understands that the 80/20 rule is fractal.

In the first case, 20% of customers bring in 80% of profits.

In the second case, 4% (20% of 20%) of customers can potentially power up to 64% (80% of 80%) of profits – so Apple needs to give these 4% an avenue to do so or else leave money on the table.

Until the Gold Apple Edition watch, Apple simply didn’t sell anything expensive enough to satisfy unmet demand from these true fans.

In a similar manner, 4% of your fanbase are so crazy about your brand that there is no question they would buy the equivalent of an 18 Karat Gold version of your product/service.

To satisfy your true fans and raise profits, you need a ‘$10k Apple Watch’.

ps. The 80/20 rule reveals why brands need a $10k Gold Watch, but why would a consumer? For that, College Humour comes pretty close to the answer

HT to my mentor, Perry Marshall, for his 80/20 insights

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