Swiss watch industry welcomes Apple’s iWatch despite warning
Apple’s design chief has allegedly warned the Swiss watch industry that it’s “in trouble” in the face of the impending iWatch release. However, Swiss watchmakers are optimistic that smartwatches will benefit them by making watches mainstream again.
Jonathan Ive, head of Apple’s design team, reportedly bragged External link that the traditional watch industry would find itself in a tough spot after the iWatch is unveiled on September 9 along with two next generations of iPhones.
The comment has been generating a lot of online buzz.
But are Swiss watchmaking companies really worried about the imminent launch of the iWatch?
It’s a question the industry has been responding to for quite some time now.
Nick Hayek, CEO of the Swatch group, does not think products like the iWatch pose a threat. In an interviewExternal link with L’Hebdo magazine, he said the arrival of new products is a fantastic opportunity to reach millions of people who do not wear a watch and convince them to do so. He also shared that Swatch’s sales in the United States have increased by 30% since fitness monitoring bracelets – another potential rival product – arrived on the market.
That view is shared by Jean-Claude Biver, head of watch brands at the luxury goods conglomerate LVMH which counts TAG Heuer, Zenith and Hublot as its subsidiaries.
He told the news website L’AGEFIExternal link that any product that encourages young people to wear watches is a good thing. According to him, the iWatch is a like a “snow plow” that could open up the path for future lovers of all types of watches.
The Swiss watchmaking industry is especially unlikely to be caught unawares by new technology after the lessons learned from the quartz watch crisis of the 1970s.
In the L’Hebdo interview, Hayek stated that the Swiss watch sector is a champion of mechanical and electronic miniaturisation, as well as innovative materials. He also said that the arrival of smartwatches is a golden opportunity for the watch industry, as it already has all the know-how to successfully integrate new functionalities into a wrist-based product.
And electronic manufacturers are aware of this. Apple recently poached the vice president for sales at TAG Heuer, presumably to take advantage of knowledge from the traditional watch sector.
However, Biver told CNBC that he was not bitter about losing a valuable employee to Apple.
"If it had been a direct competitor, I would have felt a bit betrayed, but if he goes to Apple I think it is a great experience for him," he said.
Does that mean Biver doesn’t consider Apple a threat?
In his interview with L’AGEFI, he did warn against the danger of complacency. The watch industry will have to adapt and work to turn the iWatch to its own advantage, he said.
Another point to take into consideration is the impact smartwatches will have on the electronics industry itself.
Hayek told L’Hebdo that it is electronic manufacturers that have the most to fear because smartwatches are a threat to smartphones and other portable devices, not traditional watches.
“It is going to be a great challenge for them to introduce a new product like the smartwatch that will not cannabilise the market for their existing products,” he said.
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