Seems to me it will fall out this way:

At the lower end of the market, where people who buy are more likely on a budget, the 15% savings will win the day, with price being the deciding factor.

Above that level (wherever it is), status takes over and cost is no object, so the mined diamonds dominate this segment.

Cubic Z., on the other hand (that's three hands?), will always be considered to be simply expensive costume jewelry. When a woman on a known hamburger budget walks in with a 5-carat rock on her hand, EVERYONE knows it's not the real thing.

My wife might disagree... but carbon so structured is carbon so structured. I don't if man or nature created it.

Has there ever been a more emotionally charged product? Sure, I see "organic" diamonds commanding a premium over "synthetics". Further, I see "safe" diamonds selling at a premium over "blood diamonds" from war zones.

Diamond pedigrees are conversation pieces beyond the typical 3C's -- saying you bought your fiancee a "white Siberian non-cartel diamond from a private syndicate member" is more interesting than saying you bought it at Zales.

Interesting post, Paul. And Cam: you took the words right out of my mouth. Carbon is carbon. Whether it takes the earth millions of years of heat and pressure to form a diamond, or this can be replicated in a lab far more quickly: who can tell the difference?

The snobbism factor will always be there with any luxury goods, and some women will only be interested in owning diamonds that came from deep within the earth. So be it. Lab-made diamonds will probably make it possible for more people to purchase the real deal. Open, free markets are all about choice.

I'm sure some people will pay for "natural" diamonds. But I think there's a bigger opportunity here - diamonds whose mining didn't support civil wars and kill people. (http://www.amnestyusa.org/diamonds/index.do) I suspect that would get a bigger premium price in a specific niche.

I think the key here is not lab vs. nature, as much as environmentally-friendly vs. blood diamonds. Not only do you save 15%, but you have the satisfaction of knowing that the earth wasn't ravaged and innocents mutilated.

While there is the romantic notion associated with natural diamonds. I think that when viewed against what it takes to mine a diamond will offset that notion. It's all in the spin.

I am interested to see if there will be any differences in “organic” vs. “lab” diamonds in the wedding ring and everyday ring markets. Since guys most often buy the bride’s wedding ring, will they first look to “lab” diamonds? If his wife-to-be goes ring shopping with him and finds the perfect “organic” diamond ring, will he then buy the band and look for a matching “lab” diamond to save a few bucks? And how will everyday ring market pan out– more towards “organic” or “lab”? I guess we’ll have to wait and see.

John and Stephen, I think there might be a niche market for "safe" diamonds, just like there's a niche market for fair trade coffee and products that are more environmentally responsible.

It's also interesting to note the same WSJ article mentioned how the naturally formed pearl market was "decimated" with the addition of "cultured" pearls. Now most pearls sold are "cultured".

What will happen to the diamond business if movies like "Blood Diamond" start to change perceptions about mined diamonds vs "cultured"? Especially since "cultured" diamonds won't have the stigma and association of blood diamonds.

I realize that not all mined in the ground are blood diamonds, but the diamond industry could be radically transformed by environmental, social, and market forces like cultured diamonds!

Regardless of what happens, marketing will play a big role in the outcome!

As a freelance copywriter for Charles & Colvard, the N.C.-based manufacturers of moissanite, an "extraordinarily brilliant, near-colorless jewel that's a unique blend of art and science," I understand gem warfare, and it's all about market positioning. Charles & Colvard has done well in their decision to position moissanite in its own category, and not go head to head with diamond. You men out there forget the buying power of women -- you are not the only ones who purchase expensive jewelry these days. While natural diamonds may forever be associated with engagement rings (and, trust me, women aren't generally inclined to go for the "deal" on this one) women are buying jewelry for themselves at every stage in life in celebration of their own personal and/or professional landmarks.
Moissanite, and other lab-created jewels, present an affordable option for the self-purchasing woman, without the emotional connotations of diamond. I don't see it as an either/or proposition but rather as an expanded market for those who want more.

I've had this idea for a while to sell lab-created diamonds at artificially high prices. Kind of like Fiji water, but for synthetic diamonds - ie, the chemical properties are exactly the same (H2O for water or carbon allotrope for diamonds), but it's marketed as a prestige version of the product. Plus, there's the added feel-good aspect of knowing that the product is certifiably conflict-free.

I recently got engaged. I picked out the diamond with the help of my fiance. We ended up getting a 1 1/2 size ground diamond from a well known jewelery store. I got home and have been very excited. However, a few day's later we got a call from a friend giving us info. on lab. diamonds. Out of curiosity we went to a dealer and talked to him and compared my "ground" diamond to his "lab or safe" diamond. I went home that night and was thinking about the whole experience and came to the conclusion that I would rather spend 6 grand on a diamond that came from a real diamond seed and cultivated in a lab then think about where and how and who got my diamond to where it is today. That would be on my finger. and if I am uncertain about those ethical things then why not go with a "safe" diamond? So, thats where I'm at in the whole "ground" diamond vs "safe" diamond. At least I will have a very beautiful ring and be able to sleep at night! Best Regards, Jen