0.6% of my Income

Something tickled my pattern matching circuits while reading the countless articles analyzing the pricing of the Apple Watch and Apple’s strategy behind it.

Of the 38ish distinct Apple Watch models there are, to me, only five major style variations (ignoring size): the basic aluminum Sport, at $399, less or more depending on sizes and bands. The $699 steel Watch with classic, leather or modern bands. Upgrade to a steel link band for $999 ($1099 in black). Then there is the gold Edition starting at $10,000 and going all the way to $17,000.

According to the Tax Foundation’s summary of IRS Federal Individual Income Tax data from 2011, US taxpayer individual income brackets break down like so:

Bracket Income
Top 25% >$70,492
Top 10% >$120,136
Top 5% >$167,728
Top 1% >$388,905
Top 0.10% >$1,717,675

(After a few homebrews) I see a resemblance. Quantifying that resemblance I found surprising consistency: multiply each Apple Watch price by 170 and you get something cool:

Price Model x170 Income Bracket
$399 42mm aluminum Sport $67,830 $70,492 Top 25%
$699 42mm steel classic Watch $118,830 $120,136 Top 10%
$999 42mm steel link Watch $169,830 $167,728 Top 5%
$10,000 38mm gold sport Edition $1,700,000 $1,717,675 Top 0.1%
$17,000 38mm gold modern Edition $2,890,000 $2,800,000 Tim Cook’s 2013 Salary

Apple Watch sales estimates have ranged from 8 million to 41 million. There were 34,146,428 Americans who made more than $70,492 in 2013. Are people in this bracket the intended market? If so, at the very least it seems there are at least 35 million fiscally-possible American buyers. World wide, there are many more.

The other thought that occurs to me: people claim purchasing a $10,000 watch is inconceivably irresponsible and ostentatious. Well, if your salary is $70,000 and you purchase an Apple Watch Sport you are being as irresponsible in your purchase, whether it lasts for 2 years or 50, as someone in the American 0.1% who purchases the Edition. Some estimate that 31% of Americans would like to purchase an Apple Watch – that seems irresponsible for at least some of them.

Is the Apple Watch a metaphor for American income inequality? Or maybe an Illuminati price fixing conspiracy? Probably neither. Finding patterns in numbers is fun but generally meaningless. Homework assignment: Match the 2011 income brackets to the Golden Ratio Phi.