Swiss watch industry headed for an 'ice age' thanks to Apple Watch, Swatch inventor says
Apple's soon-to-be-released entry into the wearable market could bring financial pain for the low end of Switzerland's vaunted watch industry, according to Swatch co-inventor Elmar Mock, who believes that the Apple Watch "will put a lot of pressure on the traditional watch industry and jobs in Switzerland."
"Anything in the price range of 500 francs to 1,000 francs ($500-$1,000) is really in danger," Mock told Bloomberg. "I do expect an Ice Age coming toward us."
The Apple Watch starts at $349 for the smaller aluminum Sport model, and the stainless steel variants max out at just over $1,000. The luxe Edition versions, fashioned from 18-karat gold, begin at $10,000.
Mock recalled the "quartz crisis" of the 1970s and 1980s, which precipitated the development of the plastic Swatch watch. Swiss watchmakers had failed to anticipate the public demand for less-costly quartz watches, ceding large swaths of the watch market to Japanese firms and losing tens of thousands of jobs in the process.
"So far I see watchmakers in this country making the same mistakes as back then," Mock said. "We've seen a lot of arrogance in the Swiss watch industry in the past few years, calling the smartwatch a gadget and not taking it seriously."
Most vocal among the Apple Watch's critics has been Swatch Group CEO Nick Hayek, who is on record saying that he doesn't "believe [smartwatches] are the next revolution." Hayek has since reversed course, revealing plans to take on both the Apple Watch and Apple Pay with a new smart device.
While Apple is likely to cause some heartburn for the industry, Mock is ultimately hopeful that Swiss watchmakers will not suffer a repeat of its dark days in the last century, despite his grim short-term outlook.
"We do have the technology, and the Swiss watch industry hasn't lost the competition," he added. "I just hope the top managements of the companies will react accordingly. Apple won't die if the smartwatch isn't a success. But in the next two to three years, a part of the Swiss watch market will suffer strongly."
"Anything in the price range of 500 francs to 1,000 francs ($500-$1,000) is really in danger," Mock told Bloomberg. "I do expect an Ice Age coming toward us."
The Apple Watch starts at $349 for the smaller aluminum Sport model, and the stainless steel variants max out at just over $1,000. The luxe Edition versions, fashioned from 18-karat gold, begin at $10,000.
Mock recalled the "quartz crisis" of the 1970s and 1980s, which precipitated the development of the plastic Swatch watch. Swiss watchmakers had failed to anticipate the public demand for less-costly quartz watches, ceding large swaths of the watch market to Japanese firms and losing tens of thousands of jobs in the process.
"So far I see watchmakers in this country making the same mistakes as back then," Mock said. "We've seen a lot of arrogance in the Swiss watch industry in the past few years, calling the smartwatch a gadget and not taking it seriously."
Most vocal among the Apple Watch's critics has been Swatch Group CEO Nick Hayek, who is on record saying that he doesn't "believe [smartwatches] are the next revolution." Hayek has since reversed course, revealing plans to take on both the Apple Watch and Apple Pay with a new smart device.
While Apple is likely to cause some heartburn for the industry, Mock is ultimately hopeful that Swiss watchmakers will not suffer a repeat of its dark days in the last century, despite his grim short-term outlook.
"We do have the technology, and the Swiss watch industry hasn't lost the competition," he added. "I just hope the top managements of the companies will react accordingly. Apple won't die if the smartwatch isn't a success. But in the next two to three years, a part of the Swiss watch market will suffer strongly."
Comments
I know a watch has a longer (or practically infinite) battery life, I don't care. I wouldn't wear a watch to know what time it is, I want all the other stuff. For all that, I am already accustomed to charging things.
In the end, there may be some benefit for quality watch makers as Apple expands the number of people who even consider wearing a watch. I haven't worn a watch since I started carrying a phone about 20 years ago. Now, I want that iWatch. Maybe someday, just an excellent watch.
The day Apple iPhone'd watches.
Apple's revolutionizing touch:
Computers.
On-screen typography.
Media players.
Digital content distribution (iTunes, App Store, etc.)
The music industry.
Retail.
Phones.
Tablets.
And now watches.
What's next?
B...b...b...
...Bosco!
Imagine the companies who would still be around today, or at least be in better shape, if their CEOs exhibited a little more humility in the face of new competitive threats.
Blackberry, Microsoft, Dell, Palm, the list goes on.
I think it's clear that's part of the perception Apple wishes to change with their $349 to $17,000 price range, every CE component being identical across that price range, with no capacity or performance difference only materials and looks differences, and the heavy push towards today's fashion. Will they succeed? I can't answer, but I do think it's the right way to go.
B...b...b...
...Bosco!
Burma shave!
Nearly as many watches were sold last year as handsets. It's a multi-billion dollar industry. It'll be interesting to see how this plays out. I think it's too unique for even Apple to know at this point.
The good thing here is that Apple can take their time. They don't need this to save the company like the iMac, this wasn't a 'bet the farm' move like the iPhone. Retrospect may prove different but I feel this is a solid 1.0 effort from Apple.
As far as I know, the average price of the watch today is about $3, largely made up of cheap Chinese renditions. The Western world has largely abandoned watches, other than for the high end, a very small market. Once upon a time, everyone wore watches. Then the mobile phone came along, making them redundant, like the mp3 player, the camera, etc.
Will Apple get everyone wearing watches again in the first world? I doubt it. We have iPhones.
Right now - and that perception may change over time - I see traditional watches being true jewelry whereas the iWatch is a mini computer. I like the analogue mechanical nature of traditional watches more. I still don't see the added value of a smart watch when you are carrying a phone.
the kids these days are all digital. The watch will be big. Maybe not this first cut, but analog watches will go the way of rotary phones.
"So far I see watchmakers in this country making the same mistakes as back then," Mock said. "We've seen a lot of arrogance in the Swiss watch industry in the past few years, calling the smartwatch a gadget and not taking it seriously."
This is a stupid statement. Exactly what are the watchmakers supposed to do? They make a completely different product than Apple's watch. They have zero in-house software/ecosystem capabilities. They sell a product that does one thing, tell time.... okay two if I include style/prestige.
What does Mock want? Rolex can't create a watch OS, so in theory, they'd probably have to use that piece-of-sh!t Android OS which will really put some brown skid-marks on their brand.
I think Apple will take a sizable chunk out of the watch market in the next couple years. I highly doubt that it will take away from the very high-end watch market. I think many folks that can afford 5-figure watches are not tech-literate at all. They will still want the pricey, legacy timepieces. Those will never truly go out of style.
The lower-end watch makers like swatch, timex, etc.. I think they will be impacted.
As far as I know, the average price of the watch today is about $3, largely made up of cheap Chinese renditions. The Western world has largely abandoned watches, other than for the high end, a very small market. Once upon a time, everyone wore watches. Then the mobile phone came along, making them redundant, like the mp3 player, the camera, etc.
Will Apple get everyone wearing watches again in the first world? I doubt it. We have iPhones.
The same people who buy diamonds and jewelry buy Rolex and above watches. Not a "very small" market at all. The problem is you've haven't been outside the 18-40 male market, shown by thinking everybody has an iPhone.
TV
You're being pedantic.
By iPhone, I mean any mobile phone.
I agree that it will be the sub $1000 market that will be most affected, predominately the Swiss brands that use off the shelf Swatch movements.
The type of watches you see in shopping malls.
Apple has been wise in it's price point targeting.
The detachable and interchangeable bands are also innovative and provide another revenue stream.
High end watch boutiques, not so much.
btw President Obama wears an American made Jorg Gray watch, featuring a Japanese movement given to him by the secret service who favour this brand.
Humility is an undervalued virtue.
Imagine the companies who would still be around today, or at least be in better shape, if their CEOs exhibited a little more humility in the face of new competitive threats.
Blackberry, Microsoft, Dell, Palm, the list goes on.
Don't forget Kodak & Polaroid.
Your last line states that basically we have iPhones so why do we need an Apple watch?
My answer is that I also have an iPhone and I wear a watch I received from my company on some service anniversary. I will gladly take off that watch and put the Apple Watch on because:
1. It is much more functional than my one trick pony watch.
2. I don't have to take out my iPhone and wake it up to see the time.
3. In notifications alone, the saving of time, in not having to take out the iPhone to determine who wants your attention, is significant.
4. The health benefits of monitoring your activity and getting you off your duff are significant.
5. Using Siri without taking your iPhone out is also very handy.
6. Having your airline boarding passes ready while still handling luggage with your hands is very handy (pun intended).
7. Apple Pay on your wrist is really convenient when you pay for your purchases.
.... I could go on and on but to summarize, Apple Watch gives you a beautifully designed watch which tells you the time and saves you time.
Right now - and that perception may change over time - I see traditional watches being true jewelry whereas the iWatch is a mini computer. I like the analogue mechanical nature of traditional watches more. I still don't see the added value of a smart watch when you are carrying a phone.
When you get relegated to the slow line with your smartphone in hand while the people wearing smartwatches are zipping through checkpoints to board the plane, pick up their rental, pay for their purchases, enter the concert hall, check out library books, check into the hotel, etc., then you will see the added value.
And don't expect corporations to spend money to bring speed and ease of service for smartphone-only owners up to par with smartwatch owners. If at all they will keep making it harder for smartphones to encourage people to upgrade to the device that allows the delivery of better, faster service at lower cost.