What Do Execs In The Swiss Watch Industry Think Of The Apple Watch?

This question was posted on Quora, where I try to share my passion and appreciation of watches by answering questions. I can comment first hand on this topic because I am involved in the development of watches for both traditional watchmakers and tech companies.

The watch industry survived five economic tsunamis (WWI, the Great Depresion, WWII, the 1970’s Energy Crisis and the Great Recession), so they will find a way to adapt and survive to whatever Apple is throwing at them.

The traditional watch industry sees big limitations in the planned obsolescence of all electronic devices, the Apple Watch included, and in the low margins of consumer electronics in general.

One can’t kill something that is still striving despite having become anachronistic. Cinema came, but theatre is still there. Television came, but radio is still there. The Internet came, but books are still being printed. The iPod came, but vinyl discs are still being pressed. The list goes on…

The cynics could of course mention how digital cameras killed traditional cameras, or how the printed press is being heavily challenged. But I think it has more to do with an industry failing to see the writing on the wall and failing to evolve.

Traditional watches stopped being technologically relevant between the 1970’s and the 1980’s, so Swiss watchmakers stopped selling watches as timekeepers. They instead focused on selling hand-made pieces of Art (read my post about Timekeeping And The Revival Of Mechanical Watches). As evidence, I can point out that by all logic, quartz watches should have completely erased mechanical watches from the market. However since the 1980’s, mechanical watches have grown to represent 40% of Swiss watch exports.

Most tech companies try to jump on the smart watch bandwagon, but they are oblivious to the fact that luxury has rules that you should have the humbleness of learning before trying to break them. Tech companies could learn on thing or two about how watchmakers can get away with much fatter margins by optimising the design and finishing of their metalware. For example, the Apple Watch full steel bracelet has the finishing standard of an Audemars Piguet or a Hublot bracelet, but the Swiss watchmakers manages to sell theirs at a much higher retail price than Apple does. Tech companies overkill it and as a consequence do not deviate from their standard philosophy of earning very thin margins.

That being said, watch companies can learn one thing or two from how Apple has successfully addressed a generational shift in the consumer base.

Leave a Reply