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…
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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.