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Hours Apple Watch endanger the existence of the Swiss brands
Apple Watch, with which you can do almost anything – from unlocking the door to his hotel room to pay lunch at “McDonald’s” – have the potential to compete in the battle for customers from all over the Swiss Watch Industry (the cost of which, at the moment, $ 60 billion).
In wrist quartz watches Tissot T-Touch Expert Solar from Swatch Group has a compass, altimeter, and they are powered by solar energy. Their cost ($ 1,250) is more than triple the price just hours to present Apple, which undoubtedly puts their existence in the market at risk.
However, analysts believe that the first watch manufacturers will feel the pressure of the lower price range, reports New-retail . The greatest threat looming over the small independent manufactory and company Swatch, which gets a fifth of its sales from the same name brand plastic watches and Tissot.
“No one doubts that Apple will sell in a short time, millions of Apple Watch, – said Jeff Bleyber, vice president of research firm CCS Insight on scientific work. – Brand in one fell swoop would be the market leader in “smart” watches and extremely activates consumer awareness in the segment of portable devices. ”
Happened seven years ago, the debut of Apple’s mobile phone business has turned the entire industry, creating a huge demand for smart phones, with which you can surf the Internet, listen to music and play games. Nokia and Motorola, at the time the largest manufacturers of mobile phones, barely withstood the onslaught, bogged down for years in the fight against falling sales and, as a result, both were absorbed.
Big problems in Switzerland
In early September, the New York Times quoted a senior vice president of industrial design Jonathan Apple Quince, who said , according to the newspaper that “Switzerland has a big problem” – however, he used “a vivid expression.”
“It seems that the outlook is not too rosy for fine watch brands and those who work in the lower price range – says Ariel Adams – author of one of the most popular sites on the Internet devoted to the clock. – In the foreseeable future, will suffer all watch brands, but the most immutable, and money simply flow away from them in the direction of Apple Watch ».
Shares of Swatch «sunk” by as much as 2.7%, bringing the annual decline to 17%. Swatch Group CEO Nick Hayek and other company officials declined to comment on the statement publication Bloomberg News. Zurich newspaper Tages Anzeiger quoted his statement: “The company keeps quiet.”
Quartz vs. electronics
In the 1970s – 1990s, during the “quartz crisis”, the Swiss watch industry has lost 60,000 jobs, and many manufacturers have left the business when the Japanese company Seiko «eroded” the demand for traditional mechanical watches. However, the industry was able to recover, and in the past year, exports of watches from Switzerland rose to record levels.
According to analysts of Citigroup, in 2018 the market will grow smart hours from the current $ 1.8 billion to about $ 10 billion. Half of the market of the future will make those who will go with the usual “mechanics” for high-tech devices.
Future competition will have an impact on the Swiss watch price range “low to medium”, the value of which does not exceed 1 000 Swiss francs ($ 1,066), and which are, according to the Investment Bank Vontobel, 13% of the total amount of the watch industry.
“Perhaps, the brand would be for the company Tissot Swatch only vulnerable point,” – said John Guy, an analyst at Berenberg. According to him, the sale of the brand in 2013 amounted to 1.1 billion Swiss francs.
The worst-case scenario for the company Swatch is that Apple could sell up to 20 million “smart” hours, causing a 25 percent drop in sales of Swiss watches lower price range based in the Swiss city of Biel group and a decrease in operating profit by 11% – this is the score Analysts financial conglomerate Barclays.
It looks like the head of Nick Hayek, Swatch does not bother this early in the year, when he said that consumers will not seek to purchase “smart” hours because of inadequate screen size and lack of battery capacity. But Apple Watch may well renew interest in the enhancement of the younger generation, which has long lost the habit of recognizing the time, raising the wrist to his eyes, he said.
Despite the fact that Nick Hayek is very skeptical about the prospects of “smart” watches, his company plans next year to add to the model Swatch function for fitness. A manufactured by the same company and watch brands Breguet Blancpain (the cost of such timepieces can exceed $ 100,000, especially if the body covered with diamonds) can be called “smart” for hours at least because their owner “looks clever man.”
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