Will the Rolex Daytona Beat the iWatch?

At a price tag of $ 12,400 just the orders seem to cover for the research expenses Rolex incurred into to create a watch with Cerachrom bezel aimed at  fulfilling  the aspirations of rich techies of the world. But the secret of the Rolex Oyster Perpetual Cosmograph Daytona lies in its scarcity value.

Its manufacturers hold the secret to fortune: play on the scarcity. Limited units are made so that the watch is not only a commercial success but a store of value. Consequently, all Daytona models have represented through history prime arbitrage opportunities. This model could be immediately flipped over by an additional US $10,000 over its selling price.

Through history the Daytona model has always entered the market with great fanfare. Its debut took place in  1960s as the auto racing enthusiasts it watch. In the 1970s Paul Newman took it to celebrity status. Christie’s resold one of his Daytonas for over US $1M.

On the other side of the street we see the Daytona challenger: Apple’s iWatch. Apple shipped nearly 7 million smart watches on launch year, a figure in excess of all other vendors’ combined shipments over the previous five quarters. Forecasts for Apple Watch sales have varied wildly; from as low as 9 million, to a monstrous 30 million. But there is more.

Morgan Stanley indicated in November 2014: “Street estimates run the gamut, with most ranging between 10m and 30m units in the first year. Our 30m unit estimate implies 10% penetration into Apple’s 315m iPhone 5 or newer installed base exiting 2014, which is lower than iPad penetration of 14% in its first year but higher than iPhone at 7%.”  So should Apple have sold 30 million units at an average price of US $267 the income stream would represent a healthy $8,010,000,000. Thanks to the successful market entry by the I watch  smartwatch sales are projected grow 48 percent from 2015 through 2017.

Revenue is projected to hit $11.5 billion in 2016 and $17.5 billion by 2019. Not bad for an electronic gadget!! The question however remains whether the smartwatch value will ever be able to see the Rolex Daytona in the eye. This does not seem to be a plausible scenario as the I-watch will never be able to store as much value as the signature time piece that is favored by among others Daniel Craig; Eric Clampton and George Clooney. iWatch will definitively be cool but will fail to be chic!!