The watch industry in trouble – watch industry hit by disruption
To those that lived through the “quartz crisis” of the ’70s – when cheap Japanese quartz watches threatened to overtake the market, pushing Swiss watches into luxury territory – this message is going to sound a little familiar.
The Swiss watch industry is in trouble!
The factors that are causing such trouble are being referred to as a “perfect storm” by Bloomberg View columnist Leonid Bershidsky.
- A strong Swiss Franc
- Anti-corruption campaigns in China
- The Chinese population starting to favor experiences over expensive items
- Weakening Chinese currency
- Lessened tourism due to terrorism fears
- High gold prices
While most of these factors are outside of the industry’s control, there are still other factors at play. The industry has suffered from a lack of response to the growing threat of technology and attractive gadgets like the Apple Watch.
Check out this report from the Federation of the Swiss Watch Industry. The figures revealed exports have declined – for 13 months in a row.
Chocked the watch industry – Apple claims to be second behind Rolex on the watch market
There was one slide in Tim Cook’s keynote – when introducing iPhone 7 and Apple Watch series 2 – that probably chocked the watch industry. It was a simply a clear comparison between Apple Watch sales and sales of traditional watch brands, both high and low. And it wasn’t good.
According to Apple’s CEO, Apple was the second biggest watchmaker in the world, behind only Rolex, in terms of revenue for 2015.
Go to 19:58 in the video:
But the luxury watch is dead
When Apple released the original Apple Watch in early 2015, it made a a pretty big play at the high-end watch market with its Edition line, which started at $10,000 and was encased in precious metals.
But now that watch is dead. The removal of the super-high-end watches from Apple’s offerings is telling:
Apple is making an admission that it’s not a luxury product in watches
James Dowling, co-author of “The Best of Time: Rolex Wristwatches” told Bloomberg.
Is ditching the gold watch a sign that Apple can’t play in the same league as Swiss luxury watchmakers? Jean-Claude Biver, who runs the watch division at LVMH:
Apple’s move tells Swiss high-end brands that they were right not to touch the connected watches. On the other hand, it’s a sign for the lower-end brands that they should try to make a connected watch. Because if Apple has become the second-biggest watchmaker already, without ever having touched a watch in its history, it means the connected watch has some legs
Can the traditional watch Industry save itself – forced to adapt
The traditional watch industry is living in a fast changing world.
Brands will be forced to adapt to these growing forces, however, similarly to how they did during the quartz crisis. What comes out the other side may not look similar to the current watch industry, but the sooner the industry can adapt, the better off it should be.
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Traditional watch industry hit by disruption — https://www.torbenrick.eu/t/r/qxm
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