Drop in Swiss watch exports linked partly to impact of Apple Watch
The Apple Watch was a significant factor in the drop of Swiss watch exports during the month of August, which could be leading into the industry's first annual decline in six years.
The Federation of the Swiss Watch Industry reported on Tuesday that August shipments fell 1.6 percent to 1.47 billion Swiss francs, or $1.5 billion, according to Bloomberg. Exports of watches under 200 francs ($205) were down 13 percent, while watches between 200 and 500 francs ($205 to $514) were hard hit, sliding 24 percent.
Overall Swiss watch exports did poorly the first eight months of the year, declining 1.2 percent.
While the industry's poor performance has also been blamed on a rising franc, and factors in China -- including economic trouble and a government campaign against high spending -- the Apple Watch is believed to be drawing the attention of people who would otherwise consider a low- to mid-range conventional watch. Indeed Swiss brands operating in the same price range, such as Movado and Mondaine, are now increasingly selling or developing smartwatches.
Apple appears to have had little or no impact on the Swiss export market for watches over 3,000 francs ($3,081), which rose 1.7 percent last month. While most Apple Watches sit between $349 and $1,099, the next jump is to gold Edition models, which start at $10,000.
The company yesterday released watchOS 2, addressing early complaints like the absence of native third-party apps, while adding features like Time Travel and Nightstand modes.
The Federation of the Swiss Watch Industry reported on Tuesday that August shipments fell 1.6 percent to 1.47 billion Swiss francs, or $1.5 billion, according to Bloomberg. Exports of watches under 200 francs ($205) were down 13 percent, while watches between 200 and 500 francs ($205 to $514) were hard hit, sliding 24 percent.
Overall Swiss watch exports did poorly the first eight months of the year, declining 1.2 percent.
While the industry's poor performance has also been blamed on a rising franc, and factors in China -- including economic trouble and a government campaign against high spending -- the Apple Watch is believed to be drawing the attention of people who would otherwise consider a low- to mid-range conventional watch. Indeed Swiss brands operating in the same price range, such as Movado and Mondaine, are now increasingly selling or developing smartwatches.
Apple appears to have had little or no impact on the Swiss export market for watches over 3,000 francs ($3,081), which rose 1.7 percent last month. While most Apple Watches sit between $349 and $1,099, the next jump is to gold Edition models, which start at $10,000.
The company yesterday released watchOS 2, addressing early complaints like the absence of native third-party apps, while adding features like Time Travel and Nightstand modes.
Comments
Anyone (other the Swiss, perhaps) surprised by this?
I am not.
Watch sales have been dropping for years. I stopped wearing one when I got my first dumb phone years ago. Why wear a watch when I have the time on my phone? I really don't think the Apple Watch is having much of a effect on overall watch sales. If anything it's helped sell watches to those then never wear a watch, which in turn increases over all watch sales and maybe slowing down the decline a bit.
1.2% "substantial"?
Nothing to do with a CHF appreciation of 20%....
Watch sales have been dropping for years. I stopped wearing....
Yes, yes, of course, since you "stopped wearing one" they must have been "dropping for years."
READ THE ARTICLE. (Hint: Para 1).
1.2% "substantial"?
Nothing to do with a CHF appreciation of 20%....
1.2% per month is pretty substantial. And, as your graph shows, the appreciation of the SFR relative to EUR happened at the end of last year beginning of this year (early Jan). Why does the sales decline show up only now, in August? (Also, the CHF has been relatively flat against the USD; after the initial change, it has settled back close to where it was).
(Edited).
Watch sales have been dropping for years. I stopped wearing one when I got my first dumb phone years ago. Why wear a watch when I have the time on my phone?
You need to distinguish between daily drivers and heirlooms. Sales of heirloom watches like Rolex level and above have been rising, thanks to China. You don't buy those watches to wear, you buy those watches to have. Daily drivers like Casio, Seiko, Citizen are the ones that have been dropping, but there's little money in mass-market digital anyway.
This is quite astonishing. I would never have believed it. The ?Watch has even managed to decimate Prada's sales.
Updated Sept. 15, 2015 11:22 a.m. ET
MILAN—China and Hong Kong were once Prada SpA’s hottest areas for growth. Now, they’re the biggest drag on slumping profits.
Prada’s net profit fell by almost a quarter in the first half as sales slumped in China and Hong Kong—the once-booming region that has become the Achilles’ heel for the entire luxury sector.
The Italian brand’s sales in mainland China, like many others in the luxury industry, continue to struggle as Chinese consumers opt to shop in Europe and Japan where handbags and other luxury items are cheaper due to exchange rates and the lack of high import duties.
China’s ongoing crackdown on corruption and gift-giving has also stymied demand in the market.
And it doesn't stop with just Prada, oh no, in fact the ?Watch has affected the entire Swiss economy!
NeilMacLucas
ZURICH--Switzerland's exports fell in August as the strength of the Swiss franc hit demand in the European Union and China for its chemicals, pharmaceuticals, machinery and watches.
Exports in August fell 2.1% from a year earlier, in real terms, to 14.23 billion Swiss francs ($14.64 billion), the customs office said Tuesday. In nominal terms, exports dropped 4.5%, it said.
http://www.marketwatch.com/story/swiss-exports-slip-as-franc-hits-eu-china-demand-2015-09-22
It looks like the bonkers Australian housing market has also finally come off the boil. There can only be one reason for that and we all know what that is.
You need to distinguish between daily drivers and heirlooms. Sales of heirloom watches like Rolex level and above have been rising, thanks to China. You don't buy those watches to wear, you buy those watches to have. Daily drivers like Casio, Seiko, Citizen are the ones that have been dropping, but there's little money in mass-market digital anyway.
Seiko sales have been dropping? Would you care to provide a link for that? Oh, and the same for Casio. Looking at their financial results they reported a 10% rise in sales and a 44.5% increase in profit and in terms of their watch business, report: "substantial growth in overall sales".
http://www.japantimes.co.jp/news/2015/08/12/business/seiko-ceo-eyes-premium-watch-market-bid-bolster-brand/
income growth in the segment
http://world.casio.com/file/ir/pdf/results/201507/results16_1st.pdf
It's only the start of the onslaught, year repeat of 2007-2008... Those companies should be VERY AFRAID.
It's only the start of the onslaught, year repeat of 2007-2008... Those companies should be VERY AFRAID.
No one is going to buy an Apple Watch instead of a normal watch. Watches are not a this-or-that product; they are not a zero-sum market.
Either you wear watches, in which case you will buy an Apple in addition to other watches.
Or you don't like watches, in which case you may buy an Apple Watch for the functionality but you would not have bought a normal watch anyway.
The appreciation of the SFR relative to EUR happened at the beginning of this year (early Jan). Why does the sales decline show up only now, in August?
I know you are smarter than this.
Also, the CHF has been relatively flat against the USD; after the initial change, it has settled back close to where it was.
And this negates the argument that a 20% appreciation of CHF/EUR has an impact on Swiss exports how?
It's only the start of the onslaught, year repeat of 2007-2008... Those companies should be VERY AFRAID.
No one is going to buy an Apple Watch instead of a normal watch. Watches are not a this-or-that product; they are not a zero-sum market.
Either you wear watches, in which case you will buy an Apple in addition to other watches.
Or you don't like watches, in which case you may buy an Apple Watch for the functionality but you would not have bought a normal watch anyway.
You can count me as one of those people who does not wear a watch, haven't for years and have no interest in ever buying another watch.
But I can see myself buying and wearing a smartwatch in the future though. But I am in no hurry and want to wait for things to get a little bit more mature. As good as the Apple Watch seems, it's such a nascent technology at the moment.
So I would have zero impact on the watch market and a +1 impact on the smartwatch market, when I get one at some point.
Of course I am just one person. But there's bound to be others like me.
Anyone (other the Swiss, perhaps) surprised by this?
I am not.
The Swiss aren't surprised either, despite their posturing.
The appreciation of the SFR relative to EUR happened at the beginning of this year (early Jan). Why does the sales decline show up only now, in August?
I know you are smarter than this.
Really? That's your answer? Their stuff sits on the shelf for eight months, on average? And they fully pass-through currency effects to buyers?
Also, the CHF has been relatively flat against the USD; after the initial change, it has settled back close to where it was.
And this negates the argument that a 20% appreciation of CHF/EUR has an impact on Swiss exports how?
It doesn't. It mitigates your exaggerated argument that only showed the CHF/EUR exchange rate.
I am sure you're smarter than your responses suggest.
No one is going to buy an Apple Watch instead of a normal watch. Watches are not a this-or-that product; they are not a zero-sum market.
Err…I just did. My Omega shat the bed in spring, and rather than invest in restoration, I bought a stainless Apple Watch.
Did I just disprove your point? What am I doing wrong?
There is no drive behind buying one, atleast not right now. It's a luxury product that has no real benefit to the masses unlike the iPhone.
Let's be real right now, the Apple Watch is catering to the tech crowd no different than the android watches before it. Women are hung up on fashion brands like Michael Kors, young adults and exercise buffs are big into the g-shocks, while most men are into traditional style watches.
I feel fashion will almost always trump smart watches for a considerable amount of time.
While there are no numbers to back up claims of the Apple Watches performance I don't think it's an earth shattering product. Since its release I've seen all of 2 watches, which is anecdotal.
There is no drive behind buying one, atleast not right now. It's a luxury product that has no real benefit to the masses unlike the iPhone.
Let's be real right now, the Apple Watch is catering to the tech crowd no different than the android watches before it. Women are hung up on fashion brands like Michael Kors, young adults and exercise buffs are big into the g-shocks, while most men are into traditional style watches.
You are completely and entirely wrong about this.
Apple isn't appealing to the tech crowd much, at all, at the moment. Their entire marketing is aimed at EXACTLY whom you describe, and that is primarily who is buying these things.
They're obviously not buying them in nearly the numbers that regular watches have been sold - yet. But at ONE POINT TWO BILLION wristwatches sold every year, that's gonna take a while.
http://www.statisticbrain.com/wrist-watch-industry-statistics/