Swiss watchmakers are once again weighing in on how Apple Watch might impact the Swiss watch industry after Apple yesterday revealed pricing and availability for its three Watch collections. By confirming that its 18k gold models will range from $10,000-$17,000, Apple signaled that it isn’t content to sell into the $350 – $1,000 market where the aluminum Sport and stainless steel Watch models sit; it’s also aiming at the premium luxury watch market. However, it’s the lower end of Apple’s collection that Swiss watchmakers are really worried about.
In an interview with Bloomberg, Swatch co-inventor Elmar Mock says he thinks “Apple will succeed quickly” and predicted that an Ice Age is coming for Swiss watchmakers selling into the $500-$1,000 market. “Anything in the price range of 500 francs to 1,000 francs [US$500-$1,000] is really in danger,” said Mock, speaking from Biel, Switzerland. “I do expect an Ice Age coming toward us.” Mock appears to agree with a reported quote from Apple’s Jonathan Ive that “Switzerland is in trouble,” and differs from current Swatch CEO Nick Hayek, who is aggressively targeting the Apple Watch with Swatch-branded smartwatches…
Mock compared the introduction of Apple Watch to the crisis Swiss watchmakers experienced when low-cost, reliable quartz watches were introduced and stole market share from traditional mechanical timepieces:
“Unfortunately, I’m reminded too strongly of the quartz crisis,” Mock said. “So far I see watchmakers in this country making the same mistakes as back then. 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.”
Others are hoping to combat Apple Watch with their own smartwatches. Jean-Claude Biver of the parent company behind TAG Heuer and other watch brands hopes Apple Watch will open the door to growth in the industry as a whole: “The Apple Watch may lead more young people to wear watches, and eventually they’ll be more likely to buy mechanical ones,” an interesting suggestion.
Although Mock has gone on record saying that he would wear an Apple Watch, he echoed Biver’s sentiment that it’s not too late to compete with Apple. “We do have the technology, and the Swiss watch industry hasn’t lost the competition,” he said, urging Swiss companies to “react accordingly” or see “a part of the Swiss watch market will suffer strongly” in the coming years.
It appears initially Apple Watch will be of most threat to the Swiss companies selling into the under-$5,000 market, including TAG, Swatch, and others. In that segment of the market, buyers are more concerned with the value of raw materials and functionality, by contrast with the $10,000+ market where traditional watchmaking methods and a collectible-focused mentality are often the biggest selling points.
FTC: We use income earning auto affiliate links. More.
Big question is what will be the device or resale value of the 10k gold watch following iwatch 2, 2s, 3, 3s release within 4 years. a 10k IWC or TAG watch will work and will still sell after 15-20 years of service. I know it’s not the same thing…but knowing some apple followers personally, some will still buy one at each release cash up front even though they can’t afford rent.
Gold prices have tripled in the past ten years. Some places have been saying that there could be around $2500 in gold cost alone in the Edition. So, regardless of the insides the gold value will appreciate.
So buy a $15000 gold smart watch to melt it down in 5 years for $4000 in gold or buy $15000 in gold today and have it worth $25000 in 5 years? Gold value in this Apple Watch is not an appropriate argument. 85% of the cost of the Apple Watch is NOT the gold.
Chris, gold value is part of the equation because it will have a value in ten years. I was not making any judgment regarding how other watches will appreciate in value. A used Edition watch will still have gold value in ten years, as compared to a ten year old used Sport watch, which most likely will have little to no value.
I doubt the Edition watch will be an investment like buying 15k in gold, or even another 15k watch. But in the end, and barring a collapse in the gold market, there will always be an inherent value due to the gold.
So you make a purchase like that, and expect that people keep buying on that for the next 15 to 20 years?
You know that the Swiss ultra-luxury watch industry has been riding on a bubble since the 70’s, right? That can burst at any moment?
Did you know that a Rolex Submariner (model that costs today north of $7K), costed back in the 50’s just $200, the equivalent of todays $1.2K?
Your IWC or Tag can burst tomorrow, overnight, if you bought that as an investment.
Remember that from 20 years from now, you still need a buyer to have that investment back.
Want to be smart? Forget the gold, buy the $349 Apple Watch, invest the rest $9,651 in Apple shares.
I can also answer with: So it’s worth purchasing a circuit board (made of sand and plastic) and a lcd screen for 1k? Which will be worth $150 on eBay in a few years once they drop support for the hardware? Just saying those luxury watching will still be selling for that price as they have always been, and won’t be mass produced like smart watches.
They sell diamond encrusted smartphones in Dubai and a whole division of one large company pumps them out and makes good profit, Vertu – but others including Tag Huer and Dior have played in this space, one Chinese iphone went for over 50 million as it was covered in so much ice- with smartphone lifecycles arguably far shorter than the watch, it destroys your argument, and those phones cost a lot more. The 17K watch is not aimed at those who scoff – they cannot afford one. This is squarely aimed at China and other markets, where the idea of touch communication goes over spectacularly well whilst in N America people call it tacky. Apple is making sure those top end watches have fabulous appeal for China as they have the appetite for it.
So the resale question matters to you, as you cannot afford one, it doesn’t matter so much to those that can.
That said, realistic update cycle is 3 years for each generation, just like the MacBooks. If only because the investment for Apple, as well as the mass market appeal, likely couldn’t afford much less, new models every few months would cheapen the brand, a la Samsung, and if you know anything about Apple, they take their brand very seriously.
So I have to say I think you have this wrong. And let’s face it, apple will have tested their markets out here, they are not fools. The UAE, China and other places where money is no object for some will find more than enough customers for their high end product. The rest of us can worry about steel or aluminum.
I think it’s a moot question really – because the person who will spend $10,000+ on a gold Apple Watch has so much disposable income that they couldn’t care less how long it’ll last. If it’s in a drawer after 4 years with a dead battery, they won’t care, or will just sell it for the gold value.
That’s a point in touched on Resale value reselling for the gold alone will not be enough in 5years to get even half of your money back on an apple edition watch
Again, the people who will spend that much on gold gadget don’t care. They have money to burn and will want to have the first gold Apple Watch just because.
Fashion and luxury are not rational realms… Neither is Ego.
But yet they all have their place in our societies !
Now that’s true
Apple and other smart watch makers are making aggressive plays for valuable real estate – the wrist. For some people who already wear watches, this new crop of smart watches will have them re-examine why they wear a watch. Is it a fashion accessory, is it strictly for telling time, is it an heirloom, etc.? For watch-wearing people, a smart watch may become one of many in their watch rotation. Many runners, for example, use a GPS running watch while running, wear another watch to work, and possibly another watch when they’re out on the town.
For people who don’t usually wear a watch, there are now more compelling reasons to put a computer on their wrists. As Apple demonstrated, the functionality of a wrist computer is virtually unlimited with a large app ecosystem. One crucial feature of the Apple Watch is its ability to pair with the phone over both bluetooth and a common WiFi network. At home and in an office, many people find it necessary to always be in close proximity to their smart phones. By pairing over a common WiFi network, the Apple Watch provides an unobtrusive way to stay connected without having the phone nearby. This may prove to be a very compelling value proposition.
A lot of good points, some though do not apply. Apple Watch IS NOT, under any circumstance, the $700, maybe overprices, Polar or Garmin triathlete’s tool. Beaten by heat, sun, pouring rain, those gadgets work. Apple Watch, like all sensitive smartphone tech, cannot handle extremes. Not more than a few times. Christy Turlington’s experience is a joke. At an elite level, not her 4 hr marathon, you are covered in 1 inch of sweat and water- no AppleWatch would ever survive. Then there is the LiIon heat attacking aspect- and why sports rechargeable watches do not use the same tech as smart phones. Fast charge but sensitive to temperature.
Am fairly convinced once people discover the drawbacks they will DO THE SAME THEY DID WITH SAMSUNG: return them,
IF this watch had a battery hold of 3 weeks, IF it did not require cell pairing, MAYBE. Instead? ZERO. Oh yea, bring the iphone along the run too? nope they die. everything out in sports, unless rugged for that use, will be killed by heat sweat, rain mud and so on.
The underlying issue I have is the Apple Watch maintaining its value. You are buying the same device ( I cannot refer to this as a watch ) with different casings. The functionality of the $350 sport model will be the same as the $17,000 Edition, so to tell me that Apple is charging $16,650 dollars for $2500 dollars worth of gold and longer warranty, does not make sense. The Apple brand is not worth that much in my opinion.
The functionality of a $30 casio is the same as a $100K Patek = it tells the time.
True, but that Patek will still be working in 100 years and will be a family heirloom. Will the Casio?
You don’t understand as you don’t live in the price bracket. Much of the high end marketing nowadays makes no sense to you as you are relatively poor, as are most of us. People have paid over 50 mill for diamond encrusted iphones, Vertu (Nokia) pumps out phones costing tens of thousands and they do sell. Vertu does have a 14K Android phone but none of you on here seem to know nor care.
To those people tens of thousand is like you paying 800.
This is why you don’t get it. This is why most people think Apple is wrong and then they do very well.
They see the bigger picture.
Talking about the Gold Apple watch like it is a one-off product like a diamond iPhone is not the same thing. Edition is a mass produced product so holds no exclusivity value. Apple Watch also has no prestige value as it is merely a Sport Apple Watch in a gold casing. The truly wealthy will not buy the gold Apple Watch just because they CAN. They will buy high end watches like they currently do because they retail value. You dont stay rich by purchasing 2500 in gold for 15000.
@Chris
You still don’t get it. Rich people DO BUY things that massively lose value, look at cars, clothes, they may well have a suit worth as much as that watch. So you’re argument doesn’t hold up, cars and suits depreciate.
As for mass production, well that depends on your definition. The apple watch in gold is hand made. For some that would be enough to say not mass produced. But even a Rolls Royce comes off a production line, but most would agree it is not really mass production.
@Chris
We have no idea how many of the Edition they will make. Could be less than 500. Realize that’s why the cost is so high, because like Cook said, it’ll be available in limited quantities. So you can always 10X the price of something if you only make a few hundred of it, and it doesn’t matter what it is as long as people want it, the super rich will pay to have a limited edition of something new.
And never forget:
https://timenerdworld.files.wordpress.com/2013/09/goldisbestbestbestbest.jpg?w=600
You are arguing that clothes and cars lose value so Rich people will buy the Apple Watch? WHAT? There is not Car alternative for rich to buy that GOES UP in value. There is alternatives in the Watch market. I am sorry you view the world like all rich people do is throw money at things but that is not how it works. You will see the Gold Apple Watch in hip hop videos and thats about it. Its not a product that non celebrity wealthy people will purchase.
@Chris
I’m not saying ALL rich people will buy a Gold Apple watch, just that some will because it’s gold and a limited Edition. Why are you so worked up about this anyway, who cares??
You and I are not buying one, why is everyone who is not buying one so worked up about the gold Apple watch. Is this #goldgate now??
We are all wasting our time debating on who or why anyone would buy it. If you think no one will buy it you are naive. Some will, and it’s nothing more than a publicity stunt for Apple and not a real part of the line up since so few will be made and sold. Case closed.
When it comes to the Apple Watch Edition it has nothing to do with functionality and what it is made of. People that can afford it will buy it as a status symbol first and foremost, thinking nothing of the fact that they get the same thing if they get the 350-399 Sport Model.
That I will agree with. I would do the same, If I wanted to get the watch, I would go for the 10k gold if pockets allowed it. And it will be in limited quantities anyway.
The Apple Watch is NOT a status symbol! Its a Sport Watch wrapped in $2500 worth of gold. Only you and Kayne West would call that a status symbol. Real wealthy people will continue to buy high end watches that will last generations.
Some people will buy the Edition Gold Watch (only super rich people who already own plenty of $10K+ Swiss watches) just because it’s a limited edition first model of the Apple Watch. That’s it. Everyone relax, it’s not intended to replace a future family heirloom Patek or Rolex or whatever. I bet you they won’t even make the Edition in years to come and it’s just a limited edition run because it’s the first of it’s kind. And the same people that crash Ferraris are the ones who will buy it, and no, they won’t consider it a replacement for a real expensive handmade Swiss watch. Limited Edition things cannot be sold for their actual value… that defeats the purpose of calling it limited edition, lol.
It’s for people with more money than they know what to do with. I think everyone really should just stop talking about the Edition model. This is just a big marketing fumble on Apple’s part for making it seem like a “normal” part of the line up. It’s not. It’s a limited run, limited edition and I wonder if we will even see it next year. It might only be for the very first one, for collectors.
People who buy it will be the same ones who buy and total Ferraris… money has no meaning to them because they have so much.
That being said, I could, if I really wanted to (but I won’t) buy a $10,000 Rolex, and there’s a huge difference there. The Rolex will be a family heirloom passed down to my child and will still likely be working in 100 years. The Edition Watch won’t. But again, the difference is how much value that $10K has to me versus the super rich person. To me, that watch would be one of my most valued material possessions, so I wouldn’t spend it on a gold Apple Watch which will have a dead battery in 3-4 years. But for the ultra rich person, they couldn’t care less since that $10K to them is like $100 is to me.
Make sense? People, please forget about the limited edition crazy Edition Watch. Just talk about the Sport and Watch and how amazing yet expensive that space black link bracelet is! :)
You guys are to eager to talk about a 10-15k watch from apple. That will be probably 1% if not less than that.
People should be talking about the $350.00 watch they are making which can potencially get anyones watch business and crash it in less than a year.
People have been lazy to introduce new technology in a digital watch at a price range of the apple basic watch.
I wish apple kills it in this price range because I think the features they have and the potential they could go to is incredible.
They just need to make a different shapes and built on the water resistance and they will have a gold mind with out selling a gold watch.
I agree with you. And I bet the total sales of the Gold Edition Watch will be less than 0.001%. That’s 10,000 watches based on the analyst estimates of 10 million sales in 2015. I bet they sell 1000 or less of the Gold one, which would be like 0.0001% if I’m doing my math right.
So why everyone is getting all bent out of shape over a limited run product that will sell less than 0.001% of the total sales in 2015, I have no idea.
I think I need an extra zero in each % up there, lol. Less than 0.01% is what I meant.
I’m not quite sure how Swiss watch makers would worry about their $1,000+ watches being ditched over the Apple Watch. The two markets have totally different value depreciation curves for a given amount of expenditure.
You get a Swiss timepiece, you buy something elegant and mechanical, whose (minimal if any) electronics will not be history in 2-3 years time. Apple’s products are expected to be “old” in 2-3 years. The Watch that you buy now for $1,000, in two years you will sell it for 200-250 tops, assuming it still works and its battery hasn’t died (any word on battery replacement costs here? OUCH!!!).
In other words, you buy an expensive Swiss watch and you expect it to last *well* over a decade, during which it is expected to function just like new. It is a safe investment with good value depreciation. The Apple Watch will be ancient (technology-wise) within 3-4 years at best.
Overall, the best practice is to spend as much money as you can justify to yourself losing until you buy the newest item (minus whatever you expect to make by selling the old one, if applicable). With consumer electronics, we all know this is a steep curve.
And I don’t think that many people will justify to themselves losing about a grand in a period of 2-3 years. For a watch.
I hope Apple makes the metal shell replaceable/swappable in the next Apple Watch. They could then build internals to fit the housing for a few generations, like 3 to 5 years. Inevitably, when they make a thinner housing, Apple could offer a Recycling program, like with the iPhone – buying old casings back for store credit. Thus allowing them to be re-smelted, refined and put back into new housings.