Swiss Brands Get Set to Compete with Apple Watch
The Apple Watch will go on sale in Switzerland on June 26 and some Swiss watchmakers are preparing for the invasion by adding more electronic functions to their own traditional products. Opinions are divided as to whether the coming of the smartwatch presents a legitimate threat to the luxury watch market.
According to Exane BNP Paribas analyst Luca Sola, “Swiss players depend 50 percent on the Chinese, and about 70 percent of Chinese want their watch to be Swiss-made.” Sola pointed out the potential problems luxury names could face from the Apple Watch. “High-end watches are passed down to future generations. But Apple’s move puts the pressure on.”
Swiss brands are reacting to that pressure by releasing competing products over the next few months, starting with the Frederique Constant smartwatch that is scheduled to hit stores in both the U.S. and Switzerland next week. Coming up next is the first Helvetica Smart model by Mondaine, which will be available for online pre-orders next month.
A watch that accepts mobile payments is expected from Swatch Group AG later this summer with a TAG Heuer smartwatch selling for $1,400 due in the fall. Movado Group Inc. has plans to get a wearable device into stores in time for the holiday shopping season.
While it’s almost certain that the Apple Watch models selling for $349 to $1,000 will cut into the sales of similarly priced mid-level watches it remains to be seen whether buyers who can afford to drop $10,000 or more will choose a trendy item with built-in obsolescence or one that will last a lifetime. Right now, the makers of Swiss luxury watches seem to be hedging their bets by adding a few strategic electronic features rather than going totally tech.
2015 is going to be a very interesting year for the watch market, with the futures of some brands depending on the choices they make now.