Swiss watchmakers take their time, but get smart
31 Oct 2015
Last month, Frederique Constant, a maker of Swiss watches, launched its range of smartwatches in India. Priced at Rs60,000 or more, sales of the horological smartwatch, as it is called, were expected to be quite sedate. Instead, the watch flew off the shelves, catching even its importer by surprise.
''We are completely out of stock,'' says Yashovardhan Saboo, CEO of Ethos Watches, which imports and sells Swiss watches through a chain of stores across India. ''We have ordered more, but until it comes we have taken the product off our website.''
It took some time for the Swiss to even look at smartwatches as a line of business. Smartwatches have been around for some time, but the Swiss took no notice until the Apple watch was announced. In fact, at Baselworld 2014 (Baselworld is the show where watchmakers from all over the world showcase their latest products), one watch company announced that it would unveil a smartwatch. People who went to the unveiling were treated to the launch of a regular mechanical watch. ''Swiss watches have always been smart,'' the company's CEO announced and the crowd laughed and applauded.
Not completely true. Back in the 1970s, the Japanese proved they were smarter than the Swiss. Japanese companies, mainly Seiko, launched the quartz watch and completely changed the world of timepieces. Japanese quartz watches were cheap and accurate, and quickly became popular. The effect on the Swiss watch industry was devastating. Almost 60,000 people lost their jobs and many watchmakers closed down or merged with others. It took time for the industry to recover.
Some Swiss companies introduced quartz models themselves, while others positioned themselves as makers of luxury timepieces and took advantage of the rising numbers of wealthy people with cash to spend in the west, the Middle East and China.
Today, as the threat of a smartwatch revolution looms large, Swiss watchmakers don't want to see another 'quartz crisis'. By the time Baselworld 2015 came around, about five companies announced imminent launches of smartwatches in various forms. Many others announced that they were working on their own models.
Frederique Constant, a maker of mid-range watches, was one of the first to launch a Swiss smartwatch. It's a regular mechanical watch that contains an electronic unit designed by Silicon Valley-based Fullpower Technologies. The unit tracks activity and sleep, which can be read on a small sub-dial in the main dial. It can also send information to an app on your Android or iPhone by Bluetooth. When you travel across time zones the watch automatically synchronizes with your phone and adjusts to local time without you having to turn the crown. The best part is, you don't need to charge the watch every night, the lithium ion battery lasts for two years!
TAG Heuer, a brand associated with racing and other sports, has joined hands with Intel and Google to develop its own smartwatch.
TAG is keeping specifics under wraps and has till now released only a teaser photograph that had got watch enthusiasts all fired up. Others in the race are Breitling, known for its pilot's watches, and Gucci, which has come up with the unique idea of putting all the electronics into the strap, and leaving the watch as it is. Want to upgrade? Just change the strap!
So how will these watch companies address the primary reason most people buy Swiss watches: for their longevity? Mechanical watches are timeless.
Properly maintained and handled they can last for generations. A smartwatch, on the other hand, will probably have to be thrown away in after a few years. Almost all of the Swiss watchmakers are going in for a modular design, integrating the watch's mechanical and electronic components only where it is needed. This makes it possible to change or upgrade the electronic part of the watch as often as needed, the mechanical part will last for years!
Saboo agrees that the Swiss smartwatches will not be as feature-rich as the ones that come, for instance, from Apple. ''But does anyone really want a hundred features on their wrists?'' he asks. He feels activity tracking and payments could be the only features most people need, and most Swiss smartwatches will deliver at least that.
The arrival of smartwatches is not expected to affect the sales of the top-end Swiss watches. For example, the Rolexes and Patek Philippes, which are priced $3,000 and above will always have their buyers. The fear is about how the cheaper Swiss watches will get affected.
According to the Federation of the Swiss Watch Industry, 94 percent of watches exported in 2014, in terms of numbers, are below the $3,000 price point. In terms of value, these lower priced watches accounted for 34 per cent of the total $21,53 billion industry. This is an industry well worth protecting.
Not that the smartwatch market is to be scoffed at. According to the industry body, the Smartwatch Group, the smartwatch industry was worth $1.3 billion in 2014 and will touch an estimated $8.7 billion in 2015. By 2020, it is expected to grow to a whopping $117 billion. As the world's leading watchmakers, the Swiss are not going to sit idly and watch that go by.
