Swiss watchmakers laugh off Apple’s smart watch

Swiss luxury watch makers aren’t losing any sleep over the American electronics giant’s new watch offering

Jean-Claude Biver, notorius luxury watch industry guru, thinks Apple’s new smart watch looks like it could have been designed by a first year and says it lacks a certain je ne sais quoi.

“It looks a little cold, and lacks, for my taste, a bit of personality. It looks perfect, but perfection sometimes has a lack of sexiness . . . This won’t create another crisis for the Swiss watch industry,” Biver, the president of French luxury group Louis Vuitton Moët Hennessy’s (LVMH) watch business was quoted as saying in the Wall Street Journal.

Ouch, you might think, considering the phone maker has ambitions to compete at the premier level in the watch industry, but insiders say the watch pales dismally in comparison to the likes of the high end creations of watchmakers Tag Heuer, Breguet, Tissot, Omega and Harry Winston.

“From the design point of view you cannot say it’s a watch, more an iPhone for the wrist. People may travel with it, but it won’t replace the watch you wear to a party,” Alain Spinedi, chief executive of Montres Louis Erard.

The Apple Watch will be available early next year in two sizes, 38mm and 42mm, and comes in three versions – ranging from colourful to sporty, and a high-end version featuring 18-karat rose and yellow gold, retailing from $349 (R3 844).

Industry players who should be most intimidated by Apple’s newest offering is the Swatch Group, which generates around 15% of its annual sales from watches costing under 500 Swiss francs – the price range the Apple watch will compete in.

Forecasts put Apple Watch sales at around 30 million units in the first year and Exane BNP Paribas analyst Luca Solca, reckons the Swatch Group’s domination of the market could drop to as low as 5% in 2015.

But, Swatch Group CEO Nick Hayek has told the media that he isn’t “nervous” about the competition Apple poses to his company’s sales figures, saying many of the features offered on the Apple Watch like the ‘digital crown’ button already exist on a number of Swiss watches.

Source: Wall Street Journal, Bloomberg