SMARTWATCHES - Focus on smartwatches from A to Z


SMARTWATCHES - Focus on smartwatches from A to Z
Europa Star WorldWatchWeb, 1 December 2016   
by Serge Maillard

Smartwatches are garnering little enthusiasm from Swiss companies, to say the least. Brands feel ‘forced’ to get involved, without any real appetite to do so (apart from the enthusiasm shown by TAG Heuer’s Jean-Claude Biver, but we wouldn’t expect anything less from him). The fact remains that this unstable market is in the process of establishing itself in parallel to the mechanical watch and directly on the territory of the quartz watch. A diverse range of offers has sprung up since last year. We take stock of the situation as it stands.

SMARTWATCHES - Focus on smartwatches from A to Z

The smartwatch market, which really flourished – both in terms of image and sales – following the launch of the Apple Watch in April 2015 after several years of simmering, is now showing mixed results a year and a half later. Nevertheless, we are beginning to get a better understanding of its nature. On the one hand, with estimated sales of more than 11 million units in 2015 according to market research firm IDC (a figure that should be taken with a pinch of salt, as Apple is yet to release the exact figure for the watch separate from the results of other products in the category), the Cupertino firm is the second biggest watch company worldwide. This places it directly behind Rolex, with a turnover of around 4.5 billion francs, according to the slightly provocative ranking of Swiss bank Vontobel (see table) and Tim Cook’s last keynote speech. Another smartwatch brand, Fitbit, (although the majority of their sales are of fitness bracelets), is in fifth position with a turnover of 1.8 billion, between Cartier and Patek Philippe. On the other hand, the ‘emotional’ passion – historically one of the keys to success for Apple – that we might have expected for this product category has been less pronounced than expected. The iPhone and iPad have become real technological icons of our era, even though sales of the former have declined for the first time. Meanwhile, the Apple Watch is, for the time being, far less mainstream, and its results remain modest in comparison with the 231 million iPhones and 55 million iPads sold last year. Although we should nevertheless remember that while some are quick to talk of ‘below-par performance’, these figures would excite many watch companies.

The customer experience is often disappointing and it’s highly likely that a considerable number of smartwatches end up in a drawer or back on sale a few weeks later as a result of disappointment or loss of interest in a product that remains a simple extension of the smartphone and that is yet to find its killer app (the author can attest to this). ‘Personally, I only kept my Apple Watch for two weeks,’ admits René Weber, the author of the Vontobel report. Is it in fact just a duplicate device costing the same as a smartphone?

‘Over a year since the release of the Apple Watch, there are still many question marks hanging over the smartwatch, and few answers. For the time being, we cannot say that it has had a notable impact on the low end of the market, as this is the segment that best endured the market in 2015,’ notes Jean-Daniel Pasche, president of the Swiss Watch Industry Federation.

SMARTWATCHES - Focus on smartwatches from A to Z SMARTWATCHES - Focus on smartwatches from A to Z

ANOTHER MARKETING SUCCESS FOR TAG HEUER

This burgeoning market, which currently represents just 1.5 per cent of global watch production, is nevertheless showing naturally strong growth of 224 per cent more than the first quarter of 2016. Apple is the giant in this category, with more than half of the market share, ahead of Samsung, Fossil, Casio, Garmin and TAG Heuer.

TAG Heuer Director Jean-Claude Biver has pulled off another of his customary strokes of marketing genius by positioning the historic Swiss brand as a quality alternative to the Apple Watch, following the grand launch of the Carrera Connected in New York (200,000 pieces expected in 2017, a third of total sales), particularly in the minds of American consumers. They represent a market with high potential where sales of smartwatches are already having an impact on the results for quartz watches, Swiss or otherwise.

It’s a factor that the Fossil Group is well acquainted with, following the vast operation it has launched to target this market. Probably sensing a near-miss, at Baselworld the group announced the launch of a hundred or so smartwatches for its various licensed brands. The world’s fourth leading watchmaker could even soon exclusively produce smartwatches, following the buyout of high-tech firm Misfit.

Some high-end brands, hoping to attract new generations of purchasers, are seeking to associate their image with this budding market, despite the inherent planned obsolescence that contradicts the spirit of the mechanical watch. Montblanc made an impression last year with the smart bracelet it presented at the SIHH but this has since seemed to go below the radar.

However, it’s the traditional and affordable quartz watch segment (accounting for 97.5 per cent of watch production worldwide) that is most imminently threatened by new smartwatch producers. Unlike the Fossil group, Swatch Group is yet to launch a real full-scale offensive in this niche or to partner with one of the major players from the smart ecosystem. For René Weber from Vontobel, it’s likely that a large number of quartz watches will incorporate at least a smart module in the years to come.

SMARTWATCHES - Focus on smartwatches from A to Z

NOKIA ENTERS THE FRAY

‘We expect to see major developments in the near future: smartwatches that really look like watches, easier-to-use interfaces, applications to rival those found on smartphones,’ says Ramon Llamas, head of research at IDC. While the customer experience can be disappointing with current models, smartwatches still hold great potential for improvement. One of the most promising areas is without doubt that of health monitoring tools. This is exactly why Nokia purchased the French smartwatch company Withings. After missing the boat with the smartphone, the Finnish company is focusing on medical technology. This is a huge market in our ageing society, in which smartwatches could represent one of the most interesting tools. Insurance companies are watching closely…

But will smart modules remain confined to watches, when we’re hearing more and more about smart clothes, glasses, bracelets and headphones, not to mention chips implanted directly under the skin? The smartwatch is part of the larger environment of the Internet of Things, covering everything from connected fridges to robots. According to IDC, the wearables market alone (mostly smart bracelets for the time being) is expected to reach some 110 million units between now and the end of the year, equating to 40 per cent growth compared to last year, and this will rise to 237 million in 2020. How many watches will be among these hundreds of millions of units? That’s the question being asked of the fledgling smartwatches presented since last year.

Source: Europa Star 5/16 Winter 2016 Magazine Issue



A LAST WORD TO START - “The danger is not the humanisation of robots but the robotisation of humans”
23 March 2017

Editorials - A LAST WORD TO START - “The danger is not the humanisation of robots but the robotisation of humans”

The German futurologist Gerd Leonhard was invited to the 8th Haute Horlogerie Forum last autumn. He had one piece of advice to give to young people looking for a future career path: choose (...)
Review of SMARTWATCHES
1 December 2016

Features - Review of SMARTWATCHES

Twenty-eight brands under review, from A to Z
SMARTWATCHES - MMT: a swiss engineered connected alternative + Sinn's hybrid straps
1 December 2016

Features - SMARTWATCHES - MMT: a swiss engineered connected alternative + Sinn’s hybrid straps

Manufacture Modules Technologies – otherwise known as MMT – the Swiss company established in Geneva in 2015 for the development and commercialisation of Horological Smartwatch modules, firmware, (...)
SMARTWATCHES - The smart perspective of Gerald Roden
1 December 2016

Features - SMARTWATCHES - The smart perspective of Gerald Roden

Gerald Roden is a consultant, watch industry specialist, and former director of Swiss Festina Group (Soprod ), de Grisogono, Gérald Genta, and Daniel Roth
Moons
1 December 2016

Features - Moons

What is there left to say about the moon that hasn’t already been said a hundred times, or a thousand, since the dawn of time? The moon is a nocturnal clock. The moon is a calendar. But the moon (...)
Upheavals in the discreet world of the private label watches
1 December 2016

Features - Upheavals in the discreet world of the private label watches

They are the watchmakers in the shadows, making the watches that bear the logos of others. Europa Star met with the principal players in Switzerland’s private-label (...)
Check out by “tapping out,” the future of wireless payments video
2 November 2016

News - Check out by “tapping out,” the future of wireless payments

Cash is no longer king. Hong Kong based company Tappy has launched a payment module that can be integrated with most timepieces and jewellery.
Celebrating 200 years of the chronograph
21 September 2016

News - Celebrating 200 years of the chronograph

Invented in 1816 by Louis Moinet, we take a quick look back at the history of one of the most popular complications in watchmaking history.

Europa Star, the World’s Most influential Watch Magazine, is the premier provider of international watch industry news and information. For 89 years, we have supplied watch retailers, watch distributors, watch designers, watch agents and watch manufacturers with news from the international watch industry. Our web and print publications are of interest to the specialized watch trade and the world’s most knowledgeable aficionados, watch collectors and consumers. Our magazines and websites are available in several different languages, making them accessible to all international markets and an essential tool for anyone working in the watch business and all those passionate about watches.

© 2017 Europa Star - All rights reserved.