Skip to main content

Swatch lost $1B in value on Apple Watch Series 3 launch, investors expect further falls

Swiss watchmaker Swatch saw its share value fall 4.5% on the day the Apple Watch Series 3 was launched, as Apple announced that its smartwatch is now the biggest-selling watch in the world.

That wiped almost a billion dollars off Swatch’s market cap, and investors think there’s worse to come …

Business Insider noted that options – which effectively allow investors to bet on a rise or fall in a share price – are strongly favoring a further fall.

If investors trading Swatch options are to be believed, the company’s share price woes are just getting started. They’re paying the highest premium in a year to hedge against a 10% decline in the company’s stock over the next month, relative to the cost of bets on a 10% increase, according to Bloomberg data.

What’s more, four of the five Swatch options contracts with the highest open interest — defined as outstanding commitments trading at present time — are bearish puts [betting on a fall].

Analysts say that while sales of high-end mechanical watches are unlikely to be affected, companies like Swatch – which mostly makes low- to mid-range watches – are being hit hard.

Some traditional watch manufacturers had suggested that smartwatches would be a passing fad, and that traditional watches would reassert themselves – perhaps even benefiting from renewed interest in wearables – but an analyst cited by Bloomberg says these hopes have now been dashed.

“Far from being a flash in the pan, smartwatches are bound to stay and continue to upgrade their functionality — the recently announced new Apple Watch is a case in point,” said Luca Solca, an analyst at Exane BNP Paribas.

The Apple Watch Series 3 adds LTE connectivity, allowing the watch to work as a standalone device for the first time. Pricing starts at $399, less than had been expected, though you need to add $10/month for a cellular plan from AT&T, Verizon, Sprint or T-Mobile. Apple said that battery-life would range from one hour of talk-time to 18 hours without GPS or LTE usage.

Check out our roundup of the new line-up, and Zac’s first impressions of the latest model – as well as our first-look video below.


Check out 9to5Mac on YouTube for more Apple news:

FTC: We use income earning auto affiliate links. More.

You’re reading 9to5Mac — experts who break news about Apple and its surrounding ecosystem, day after day. Be sure to check out our homepage for all the latest news, and follow 9to5Mac on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our exclusive stories, reviews, how-tos, and subscribe to our YouTube channel

Comments

Author

Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


Ben Lovejoy's favorite gear

Manage push notifications

notification icon
We would like to show you notifications for the latest news and updates.
notification icon
You are subscribed to notifications
notification icon
We would like to show you notifications for the latest news and updates.
notification icon
You are subscribed to notifications