Apple Watch to trigger ice age for Swiss watch industry

Yellow gold Apple Watch EditionApple is expected to pole vault right to the top of the smartwatch manufacturer list this year with the Apple Watch. The impact will be felt not only by other smartwatch manufacturers but also by the traditional watch industry. Elmar Mock, the co-inventor of the Swatch, predicts that Apple will sell about as many Apple watches a year as the entire Swiss watch industry exports every year.

“Apple will succeed quickly.” explained Mock “It will put a lot of pressure on the traditional watch industry and jobs in Switzerland.” He predicts that hardest hit will be watches in the CHF500 (about CA$630) to CHF1,000 (about CA$1,260) range. “I do expect an Ice Age coming toward us,” he added.

Mock warns that the Swiss watch industry is being “arrogant” when it dismisses smartwatches as a gadget. it could be decimated much as it was during the Quartz Crisis in the 1970s and 1980’s when inexpensive quartz watches took over the market and saw the demise of some 1,000 Swiss watchmaking companies taking with them some 60,000 jobs.

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The silver lining for the Swiss watch industry may be in the luxury watch market. It remains to be seen if smartwatches which are likely to come obsolete within years as newer models offer better features will be able to displace traditional watches that not only keep their values over decades but often grow in value as well.

Some Swiss companies are getting into the smartwatch business. Both Tag Heuer and Tissot will launch such devices later this year. For its part, Montblanc has announced the e-Strap which helps turn a traditional watch into a smartwatch.

It’s clear though that the Swiss watch industry is entering a time of profound transformation. It just remains to be seen what it will look like a few years from now. “We do have the technology, and the Swiss watch industry hasn’t lost the competition,” Mock concludes. “I just hope the top managements of the companies will react accordingly. Apple won’t die if the smartwatch isn’t a success. But in the next two to three years, a part of the Swiss watch market will suffer strongly.”

Source : Bloomberg