LG Just Dropped a $1,200 23-Karat Gold Smartwatch

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By Arjun Kharpal, CNBC

South Korea's LG has unveiled a 23-karat gold smartwatch on Monday as it looks to challenge Apple in the luxury wearable space.

The LG Watch Urbane Luxe costs $1,200 and only 500 will be made, each engraved with its own unique serial number.

LG is billing the smartwatch as "more jewelry than wearable," giving it an alligator leather strap and selling it in a "piano-gloss lacquer case" as its looks to target the high-end buyer.

The product launch comes as device makers begin to focus on how to make wearables, in particular smartwatches, more fashionable. In March, Apple unveiled the 18 karat gold Apple Watch Edition to draw luxury buyers to its wearable product.

"This blending of craftsmanship and technology is a natural evolution of the smartwatch, which is becoming more of a lifestyle accessory than a piece of hardware. We think this is a good direction for wearables and we want to encourage this transformation," Chris Yie, vice president and head of marketing for LG Mobile Communications Company, said in a press release.

Read More from CNBC: Will FitBit Flop as Smartwatches Take Over?

The wearable market is growing at a stunning rate, albeit off a low base. Shipments in the second quarter came in at 18.1 million units, up about 223 percent from 5.6 million units during the same period last year, according to market research firm IDC. The Apple Watch debuted as the second biggest player by market share with Fitbit at the top.