Conventional watch sales slide after Apple Watch launch, NPD says
American sales of conventional watches fell by the steepest amount in seven years during the month of June, a decline linked in part to the debut of the Apple Watch, market research firm NPD Group said on Friday.
Unit sales were down 14 percent year-over-year to about 927,500, the harshest decline since 2008, NPD told Bloomberg. Retail revenue slid by 11 percent to $375 million.
The head of NPD's luxury division, Fred Levin, noted that watches costing less than $1,000 were most likely to be impacted by the Apple Watch, since that's the range in which people have said they're most likely to buy Apple's product. Indeed watches costing between $50 and $999 suffered setbacks in June, although the most damage came in the form a 24 percent drop for pieces costing between $100 and $150.
Lower-cost brands like Timex, Burberry, and Tissot did poorly during the month, as retailers tried to use discounts to combat consumer saturation.
The true impact of the Apple Watch is difficult to gauge, mostly because Apple has refused to share exact sales numbers or even break out Watch revenue reporting into its own category. Bloomberg remarked, though, that since the category containing the Watch gained $950 million within the product's first quarter, Apple presumably sold at least 1.9 million units, assuming an average selling price of $499.
Unmentioned by NPD is what impact other smartwatches might be having. Although devices from the likes of Pebble, Garmin, and Motorola have had relatively modest success, they could be doing well enough to eat into conventional watch sales.
Unit sales were down 14 percent year-over-year to about 927,500, the harshest decline since 2008, NPD told Bloomberg. Retail revenue slid by 11 percent to $375 million.
The head of NPD's luxury division, Fred Levin, noted that watches costing less than $1,000 were most likely to be impacted by the Apple Watch, since that's the range in which people have said they're most likely to buy Apple's product. Indeed watches costing between $50 and $999 suffered setbacks in June, although the most damage came in the form a 24 percent drop for pieces costing between $100 and $150.
Lower-cost brands like Timex, Burberry, and Tissot did poorly during the month, as retailers tried to use discounts to combat consumer saturation.
The true impact of the Apple Watch is difficult to gauge, mostly because Apple has refused to share exact sales numbers or even break out Watch revenue reporting into its own category. Bloomberg remarked, though, that since the category containing the Watch gained $950 million within the product's first quarter, Apple presumably sold at least 1.9 million units, assuming an average selling price of $499.
Unmentioned by NPD is what impact other smartwatches might be having. Although devices from the likes of Pebble, Garmin, and Motorola have had relatively modest success, they could be doing well enough to eat into conventional watch sales.
Comments
Could it be that people considering a new watch waited to see what the Apple Watch was all about? Statistics don't tell the whole story.
They might be sliding in the US, but the predicted negative impact on Swiss watchmakers does not appear to have happened. Their sales have actually increased slightly, which is astonishing given the recent severe appreciation in the value of the Franc.
Unfortunately for Apple, the expected impact on the Swiss watch market doesn’t appear to have happened and, according to a report Business Insider – it isn’t expected to happen any time soon. This left the prediction of Jonathan Ive, Apple’s design chief, that Swiss watch manufacturers were going to be in “trouble” (according to the New York Times, he chose a “much bolder term than trouble to describe the predicament that Swiss watchmakers would find themselves in”) after the release of the Apple Watch, looking very hollow indeed.
The predicted drop off in sales from Apple 2014 to 2015 never materialised and sales of Swiss watches have actually increased in the United States and in China, places you would expect to be first to adopt the new Apple technology. While there’s still a possibility that sales could start to drop off, most manufacturers are confident that it won’t happen, especially now that the initial “buzz” around the Apple Watch has begun to die off.
https://www.firstclasswatches.co.uk/blog/2015/06/has-the-apple-watch-affected-the-swiss-watchmakers/
What a joke. First of all we have NO idea if Jony Ive made that comment and if he did if he was being serious. It was complete hearsay. Also, when Ive spoke at that Condé Nast luxury conference in Italy he specifically said he didn't think ?Watch was competing with luxury mechanical time pieces (of which I'm sure he owns many). And then he went on to talk about the software and how ?Watch could do things that mechanical watches can't. It's just the stupid media that is trying to turn this into competition between ?Watch and luxury mechanical watches as a way (they think) to make ?Watch look bad.
They might be sliding in the US, but the predicted negative impact on Swiss watchmakers does not appear to have happened. Their sales have actually increased slightly, which is astonishing given the recent severe appreciation in the value of the Franc.
https://www.firstclasswatches.co.uk/blog/2015/06/has-the-apple-watch-affected-the-swiss-watchmakers/
I never thought it would be an instaneous thing like armageddon or a rapture. After the release of the iPhone, Nokia and Blackberry (RIM) continued to sell phones for years. It took many years for the market to sour for them. The watch may or may not do that. Time will tell. High end watchmakers may not have much to fear or maybe they will as they all compete for the same spot on the wrist. But if you are Chanel or one of the similar stylish accessory watch makers you should probably look at making Apple watch bands if you want to stay in the game. My wife has left her J12 in the jewelry box the last couple months in favor of her Apple watch which cost a sixth of the price and quite honestly even as an Apple fan I don't think it looks as nice, but I can't argue it is not significantly more useful.
They might be sliding in the US, but the predicted negative impact on Swiss watchmakers does not appear to have happened. Their sales have actually increased slightly, which is astonishing given the recent severe appreciation in the value of the Franc.
https://www.firstclasswatches.co.uk/blog/2015/06/has-the-apple-watch-affected-the-swiss-watchmakers/
http://www.bloomberg.com/news/articles/2015-08-07/apple-helps-push-u-s-watch-sales-to-biggest-drop-in-seven-years?
This completely obliterates your linked article. It may be that there is no causation, and no link to Apple sales, but it sure isn't a sales increase year over year.
http://www.bloomberg.com/news/articles/2015-08-07/apple-helps-push-u-s-watch-sales-to-biggest-drop-in-seven-years?
This completely obliterates your linked article. It may be that there is no causation, and no link to Apple sales, but it sure isn't a sales increase year over year.
I also wonder how many people are just not buying a traditional watch now because they are saving for an Apple Watch or just the thought of buying something now when waiting a few months could allow them them to choose form a whole new generation of smart watches making dropping a few hundred bucks on a quartz watch seem like a waste of money.
When the first iPad came out I didn't rush out and buy one. I actually didn't buy one until the iPad 2 was released. But In the meantime I didn't go out and buy a netbook either.
I also wonder how many people are just not buying a traditional watch now because they are saving for an Apple Watch or just the thought of buying something now when waiting a few months could allow them them to choose form a whole new generation of smart watches making dropping a few hundred bucks on a quartz watch seem like a waste of money.
I think that you are on to something.
While I don't think that the Apple Watch is for everyone, especially at this point in time, a consumer would certainly become aware of the differences between traditional watches for timekeeping and smartwatches. I think that adding retail outlets for the Apple Watch will have the effect of reinforcing a wearable paradigm over a traditional watch for a broader range of the public. Given time, we will see the Apple Watch move from a curiosity and novelty, to an expected part of our social connection.
http://www.bloomberg.com/news/articles/2015-08-07/apple-helps-push-u-s-watch-sales-to-biggest-drop-in-seven-years?
This completely obliterates your linked article. It may be that there is no causation, and no link to Apple sales, but it sure isn't a sales increase year over year.
Obliterates? Actually it seems to confirm what was stated in the original article I linked to.
Of course you will now invoke the usual smokescreen of shipments vs sales argument and warehouses bulging at the seams with unsold Tags and Rolexes
I agree, and I seem to recall just about every Apple iOS device had as slow start including the iPhone itself and Steven even said he'd see 1% market share as financially worth while, I bet a similar figure is true for watches.
By the way I hear Apple is working on a wedding, nose, and engagement rings as well as earnings, pendants and necklaces that are fully functional iOS devices using Siri.
Quote:Obliterates? Actually it seems to confirm what was stated in the original article I linked to.
Of course you will now invoke the usual smokescreen of shipments vs sales argument and warehouses bulging at the seams with unsold Tags and Rolexes
"U.S. watch sales fell the most in seven years in June, one of the first signs Apple Inc.’s watch is eroding demand for traditional timepieces.
Retailers sold $375 million of watches during the month, 11 percent less than in June 2014, according to data from NPD Group. The 14 percent decline in unit sales was the largest since 2008, according to Fred Levin, head of the market researcher’s luxury division."
So May and June were both down; hence the connection with the Apple watch sales. Presumably, some of those are Swiss Brands.
I'm pretty sure that you are, as usual, full of it.
When you buy a "luxury" watch, you are paying a huge markup for the brand. Some costing as much or more than a car.
When you buy an Apple watch, you get the fine craftsmanship, premium materials, and the brand with a very reasonable markup. One could make the case that the Edition version is a luxury watch in terms of price point, but the added cost comes primarily from the materials, I think.
I also wonder how many people are just not buying a traditional watch now because they are saving for an Apple Watch or just the thought of buying something now when waiting a few months could allow them them to choose form a whole new generation of smart watches making dropping a few hundred bucks on a quartz watch seem like a waste of money.
When the first iPad came out I didn't rush out and buy one. I actually didn't buy one until the iPad 2 was released. But In the meantime I didn't go out and buy a netbook either.
I think that you are on to something.
While I don't think that the Apple Watch is for everyone, especially at this point in time, a consumer would certainly become aware of the differences between traditional watches for timekeeping and smartwatches. I think that adding retail outlets for the Apple Watch will have the effect of reinforcing a wearable paradigm over a traditional watch for a broader range of the public. Given time, we will see the Apple Watch move from a curiosity and novelty, to an expected part of our social connection.
Maybe there is a large segment of people who just don't wear watches anymore, I am in that group. AppleWatch will give them a reason to get one where otherwise, they would not wear them at all. Since the fall of 2000, I have just used my pager and then my cell phone to keep time. That is a large segment to market to in order to sell them a watch.
I think it's interesting that Apple's watches are luxurious, but they are not "luxury" watches.
When you buy a "luxury" watch, you are paying a huge markup for the brand. Some costing as much or more than a car.
When you buy an Apple watch, you get the fine craftsmanship, premium materials, and the brand with a very reasonable markup. One could make the case that the Edition version is a luxury watch in terms of price point, but the added cost comes primarily from the materials, I think.
When you get a luxury watch you get a product that most likely will last you a lifetime.... and they tend to appreciate over the period. An Apple watch is a consumable good - it will likely have a limited lifespan after which you will have to go out and buy the new version.... completely different markets.