Swiss watch exports suffer largest decline in 6 years following Apple Watch launch

Posted:
in Apple Watch edited November 2015
Swiss watchmakers woke up to news of another steep decline Thursday, as October shipments of mechanical watches declined 12 percent to $2 billion, the largest decline in six years.




The new report, released in a statement from the Swiss customs office, showed total Swiss Watch exports to the U.S. dropping 12 percent.

The country with the most pronounced drop-off was Hong Kong, whose share of shipments dropped just under 40 percent. Traditionally a huge marketplace for Swiss watches, weak demand has led to declining sales from high-end Swiss manufacturers like Richemont, while others like TAG Heuer have closed stores in the country this year.

Swiss Watch sales are said to make up one tenth of the country's total exports, which have declined 3.2 percent over the first ten months of this year. The news follows similar drop-offs over the course of this year, including an 8.5 percent drop-off last quarter, which was reported last month.

At the same time Swiss watch sales are declining, smart watch sales continue to accelerate, with Apple Watch sales reaching more than $1.69 billion in revenue through the end of September, according to numbers extrapolated from the company's recent 10-Q filing. The smart watch category as a whole has also received a lift from Apple's entry into the market, with both Pebble and Fitbit reporting better-than-expected numbers for their respective lines of wearable devices.

Despite earlier bluster and claims that traditional mechanical watch buyers wouldn't be drawn to smart watches, some Swiss watch companies now seem to be doing an about-face and are embracing the idea of smart technology on the wrist. TAG Heuer released a "smart" version of its famous Careera watch earlier this month, which runs on Google's Android Wear platform and retails for $1,500.
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Comments

  • Reply 1 of 84
    Ouchie
  • Reply 2 of 84
    calicali Posts: 3,495member
    But the Watch isn't selling. So what could the problem be?

    /analysts
  • Reply 3 of 84
  • Reply 4 of 84
    A luxury Swiss hybrid smart watch using Android. They probably plan to sell it alongside a Kia-engined Porsche.

    The marque who swings a deal with Apple to marry WatchOS to their mechanical movement is going to own this segment. Now how much of their soul are they willing to give up to seal the deal?
  • Reply 5 of 84
    Quote:

    Originally Posted by SpamSandwich View Post



    #SwissLivesMatter

    Very funny! Really made me laugh.

     

    Best

  • Reply 6 of 84

    “We’ve learned and struggled for a few centuries here figuring out how to make a decent watch,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”

     

    Ed Colligan's Doppelganger in Zurich.

  • Reply 7 of 84

    Purely coincidental.  There's no way that the Apple Watch could impact the Swiss watch market ;)

  • Reply 8 of 84
    dreyfus2dreyfus2 Posts: 1,056member
    Careera? Nice typo.

    While smart watches do certainly have an impact, especially in the huge $300 - $2,000 segment, there is also some kind of perfect storm happening here. Slowing economies, unfavorable exchange rates for the Swiss Franc, and a continued design vacuum for expensive products. Even the more recent well designed luxury watches are now 10 to 20 year old designs, the big money is still in models that haven't changed a lot in my lifetime. And most of the newer stuff is just tasteless (e.g. everything Tag makes is cringeworthy and a bad copy of other brands).

    Having Apple entering the market certainly did not help them, but economics an their own complacency did at least as much damage.
  • Reply 9 of 84
    "My Rolex will work at the bottom of the Mariana Trench. Your 'looser' smartwatch can only be submerged to the bottom of your bathtub. My Rolex wins."

    Repeat this to ease the pain.
  • Reply 10 of 84
    jungmarkjungmark Posts: 6,544member
    It can't be the Apple Watch. It's a failure. I attribute the decline to the success of the Microsoft Band. /s
  • Reply 11 of 84
    sog35 wrote: »
    BUTT.

    Its hilarious that the hate for the AppleWatch has started to disappear.
    Now they are targeting the iPad Pro.
    Losers.

    Face it. Apple is smart.

    You underestimate the intransigence of the Apple hater. Naysaying doesn't have to be well thought out, or consistent over time, just reactionary enough to say Apple is always wrong.
  • Reply 12 of 84
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by cali View Post



    But the Watch isn't selling. So what could the problem be?



    /analysts

     

    People just aren't reading (the time) any more?

  • Reply 13 of 84
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by AppleInsider View Post

    The new report, released in a statement from the Swiss customs office, showed total Swiss Watch exports to the U.S. dropping 12 percent.

     

    Time to ramp up that Emmental export quota.

    And Toblerone and cuckoo clocks too.

  • Reply 14 of 84

    Nah, it's just "pent up demand" for Swiss watch makers' game-changing range of upcoming smartwatches. 

     

     

     

     

     

     

     

     

    :D

  • Reply 15 of 84
    dreyfus2 wrote: »
    While smart watches do certainly have an impact, especially in the huge $300 - $2,000 segment, there is also some kind of perfect storm happening here. Slowing economies, unfavorable exchange rates for the Swiss Franc, and a continued design vacuum for expensive products. Even the more recent well designed luxury watches are now 10 to 20 year old designs, the big money is still in models that haven't changed a lot in my lifetime. And most of the newer stuff is just tasteless (e.g. everything Tag makes is cringeworthy and a bad copy of other brands).

    Design vacuum? What? Is that now a bad thing?

    You're supposed to praise stale, horse drawn carriage-era designs as "storied" and "timeless" without the whims of modernity. There were a bunch of Swiss watch fans (and Get Off My Lawn types) who were in these forums saying that Swiss watches were precious heirlooms that you could give to your grandchildren someday, and they would wind it up and use it long after the first gen Apple Watch is obsolete. As if standing still in design and technology was a good thing to be praised about analog Swiss time pieces.
  • Reply 16 of 84
    melgrossmelgross Posts: 30,512member
    I have no doubt that the Apple Watch is causing some drop in Swiss watch sales. But to attribute all, or even most of it to Apple's product is wrong. There are a number of reasons why those watch sales have been falling.

    A major one is the Swiss Frank has gone up in value so that Swiss products are more expensive around the world. In Hong Kong, one of their biggest markets, expensive watch sales are down mostly because of that, but also due to the slowing Chinese economy. The same thing is true most everywhere else. Apple's watches are going to affect the lower priced Swiss watch models, not the higher priced ones.

    I talk to people who, like I do, have some expensive watches. A number of them will be buying the next gen model Apple Watch next year, as I will. It's not always going to be that a person will have an Apple Watch or a mechanical one. People who can afford these things will have both.
  • Reply 17 of 84
    dreyfus2dreyfus2 Posts: 1,056member
    Quote:

    Originally Posted by sog35 View Post

     

    WRONG. Stop trying to minimize Apple Watch success.


     

    I was not minimizing anything (just the opposite, between my GF and myself we have 4 Apple Watches ourselves), just stated some other factors, all of which are real.

  • Reply 18 of 84
    dreyfus2dreyfus2 Posts: 1,056member
    Quote:

    Originally Posted by Suddenly Newton View Post





    Design vacuum? What? Is that now a bad thing?



    You're supposed to praise stale, horse drawn carriage-era designs as "storied" and "timeless" without the whims of modernity. There were a bunch of Swiss watch fans (and Get Off My Lawn types) who were in these forums saying that Swiss watches were precious heirlooms that you could give to your grandchildren someday, and they would wind it up and use it long after the first gen Apple Watch is obsolete. As if standing still in design and technology was a good thing to be praised about analog Swiss time pieces.



    :-) It certainly becomes a bad thing once you fail to attract new customers, or cause existing ones to come back for more. I have been buying and selling off mechanical watches for most of my life, but it just became too expensive since resale prices imploded.

     

    (And I still think "timeless" is a terrible property for a watch...)

  • Reply 19 of 84
    Quote:
    Originally Posted by melgross View Post



    There are a number of reasons why those watch sales have been falling.



    A major one is the Swiss Frank has gone up in value so that Swiss products are more expensive around the world. 

    USD/SFR:

    April 24* -- $0.96/SFR

    Today -- $1.01/SFR

     

    USD/HKD:

    April 24* -- $0.12/SFR

    Today -- $0.13/SFR

     

    Barely any appreciation. (I think you may be conflating it with its appreciation against the EUR).

     

    *Date of AppleWatch intro.

  • Reply 20 of 84
    radarthekatradarthekat Posts: 2,421moderator
    melgross wrote: »
    I have no doubt that the Apple Watch is causing some drop in Swiss watch sales. But to attribute all, or even most of it to Apple's product is wrong. There are a number of reasons why those watch sales have been falling.

    A major one is the Swiss Frank has gone up in value so that Swiss products are more expensive around the world. In Hong Kong, one of their biggest markets, expensive watch sales are down mostly because of that, but also due to the slowing Chinese economy. The same thing is true most everywhere else. Apple's watches are going to affect the lower priced Swiss watch models, not the higher priced ones.

    I talk to people who, like I do, have some expensive watches. A number of them will be buying the next gen model Apple Watch next year, as I will. It's not always going to be that a person will have an Apple Watch or a mechanical one. People who can afford these things will have both.

    There will come a day, when the functionality of a smart watch is too compelling to swap out for a mechanical watch, even for an evening out on the town. When you've become adjusted to your car unlocking and powering up (air con adjusting, maybe the car even unparking itself and coming to pick you up at the door) by reacting to your control via your smart watch, then the watch on your wrist is going to be less about fashion and more an integral part of your existence. So you won't be swapping it out. Maybe you'll swap out something else, but it won't be your watch, any more then you swap between multiple differently styled wedding rings.
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