I want your opinion! Jonathan Ive, Apple’s design chief, said: “Switzerland is in trouble”. Do you agree? Will the Swiss Watch Industry really be in trouble?

Jonathan Ive, Apple’s design chief, said: “Switzerland is in trouble”

Last week Jonathan Ive announced troubles for the Swiss Watch Industry, today I learned through Reuters that Apple Inc also invited top fashion editors and bloggers for the September 9th event. What do we have to expect?

9to5Mac reported last week:

“Ahead of Apple’s September 9th event that will include the introduction of Apple’s first wearable computer, along new, larger iPhones, The New York Times has profiled the existing wearable market. The juiciest bit from the story? A purported quote from Apple design chief Jony Ive, relayed by another Apple designer. Said Ive, referring to the existing watch market, ‘Switzerland is in trouble.’

Here’s the full section:

According to a designer who works at Apple, Jonathan Ive, Apple’s design chief, in bragging about how cool he thought the iWatch was shaping up to be, gleefully said Switzerland is in trouble — though he chose a much bolder term for ‘trouble’ to express how he thought the watchmaking nation might be in a tough predicament when Apple’s watch comes out.

So, it appears Jony did not actually say ‘trouble.’ He said something ‘bolder.’ Perhaps ‘screwed’?”

Jonathan Ive, Apple’s design chief, said: “Switzerland is in trouble”
Jonathan Ive, Apple’s design chief, said: “Switzerland is in trouble”

 

Today Reuters reports:

“Apple Inc has invited top fashion editors and bloggers in unprecedented numbers to its Tuesday launch gala, further evidence that the iPhone maker is preparing to take the wraps off a smartwatch. Apple is forging closer ties to the fashion world as it plots its foray into the fertile field of wearable technology, trying to win over a critical crowd that may prove crucial to the success of consumer gadgets worn around the body.”

 

Guys what do you think? Is Apple going to endanger the Swiss Watch Industry with its new iWatch or however Apple is going to call the device?

 

Nick Hayek, CEO of Swatch Group, gave a clear answer and said: “No! The Swatch Group is ready to launch its own smart watch next year and Swatch Group was a pioneer for smart watches when launching the Swatch Paparazzi already in 2004. We have never stopped producing smart watches since then.”

The picture shows you the very first two smart watches, the Swatch Paparazzi from 2004 and the Tissot High-T from 2005. If you wish to see more detailed pictures of these watches please click  HERE  and scroll through the five pages…

Swatch "Liquid Touch" 2014, Swatch "Paparazzi" 2004 and Tissot "High-T" 2005
Swatch Liquid Touch 2014, Swatch Paparazzi 2004 and Tissot High-T 2005
Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

 

Please do also listen to my interview with Nick Hayek taped in Basel during Baselworld 2014. Nick Hayek and I discussed the smart watch intensively … Click  HERE  to get to the interview…

 

Here are my two cents:

I personally think any smart watch will seriously harm the traditional mechanical sector of the Swiss Watch Industry. We are talking about two totally different segments and also a different buyer. I could be that someone who was used to wear a mechanical watch will now also wear a digital smart watch, but it will never replace the mechanical timepiece on his wrist. In contrary, I believe that Apple and all the other producers of smart watches will probably stimulate people who never before wore a watch to buy one now and I could imagine that these people later start buying other watches and finally some of them end up buying a mechanical watch. I don’t even think the smart watch will harm the quartz sector, since I know that today many companies have gathered a lot of know-how and they are ready to shoot back if necessary. The fact why no one in Switzerland has yet presented such a watch is, that they wait to see in which the developments really go. There is no need for the Swiss watch manufacturers to take the lead here…

Another question is: Will Apple really present a watch or will it be a “digital” bracelet? I believe it first will be a bracelet. A “digital” bracelet could be worn by anyone. People who don’t wear watches at all and also people who already have a watch on their wrist could wear it. This “digital” bracelet would only replace some other bracelets at the wrists and it could become a new fashion to wear such a device. In this case Apple would create a new market and not compete against any watch manufacturer.

Another question is: If Apple really presents the iWatch, will it then be a round shaped one or just a kind of Bonsai-iPhone for the wrist?

 

Now it is your turn…

Please let me know what you think! 

 

 

 

 

 

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  • Eric

    Because of mobile device time synchs, there are generations that have not really experienced watches. Ironically, Apples move into the watch space may help the industry by introducing new users to wristwatches, creating cross over buyers.

  • Mike Olson

    I hope it will 😉

    the watch brands will be affected in one way or another. If Apple decides to throw in its full weight the watch world will be shaken up. Wherever Apple enters, its followers aren’t far…so we will see brands like MS and Samsung follow. The budgets and Marketing experience that those giants bring into the game is simply huge. Don’t forget that the watch industry wasn’t challenged by outsiders since the 80’s when Qtz revolution almost destroyed it. I am sure it hits them completely unprepared.

    I am sure the certain brands will be hit hard by this entry. Some because they operate in a similar field of “functional watches”, just like Tissot or Casio other simply by the fact that we have only a limited amount of real estate on our wrists.

    Overall I am excited, as this will shake things up a bit…let’s face it that industry became pretty lazy and opportunistic in the last years! Everybody doing more or less the same kind of savoir-faire/heritage ads & apps, products and CEO meets famous ppl events…

    Exciting times might be ahead of us watch lovers!!!

  • alex ioancio

    I don’t understand what’s the point and what are these talks about. To much fuss for nothing!
    Mr Ivy , I think you have to look in your own garden and see what’s up there. I’ve got my ba..s filled whit the politics to buy something and after that somebody is forcing me to buy applications . The second one : the design of this Iwatch is so gorgeous that I think that for 1000 years nobody can approach the nearby. It is absolutely stunning. The hands the dial the finish the bezel and the saphire crystal are incredible. Or I am wrong. All this is fiction. The design and the concept is so that in every cartoon , the characters wear the same design model.
    Good luck with it but spare me folks!!

  • TELMO ROGÉRIO SECCO

    NADA NO MUNDO IRÁ ACABAR COM A MAGIA DO TIC-TAC NO PULSO DOS AMANTES DO RELÓGIO MECANICO OU ATÉ MESMO A QUARTZ.A AUTONOMIA DA CORDA AUTOMATICA OU A LONGA DURAÇÃO DA BATERIA,SÃO FATORES DICISIVOS PELA RELOJOARIA ATUAL.MUITAS FUNÇÕES EM ELETRONICA ACABA EM CONFUSÕES.

  • Glenn

    After Apple failed to have a US-made watch marked “Swiss Made” few months back, it now threatens to endanger the swiss watch industry. Oh Come on…

  • Thomas

    Alex, I don’t know what you think but I m not convinced that this Iwatch would be a game changer? Mr. Hayek you can relax. All the previous products intrigued me by their design and the simplicity. This one looks very bulky. They want to sell 60 Mio pieces of this in the first year – seriously! I rather would buy another System 51, the new Rado dual time or the Tissot Touch Solar but that’s me.

    • Alexandra

      It is undoubtedly true that all electronic devices will be reinvented in a year . So what should be done with your Iphone watch in the next year or two ?
      When you have a real watch , an automatic hand -winding movement , you may fix it even in 100 years and pass it to your grand son …This is worth it ! This is a real value !

  • Dartagnan

    I watched the Apple Live Event and even though I am a lover of all things mechanically horological, I couldn’t help but be impressed with the range of features and sleek design of the Apple Watch (nee. iWatch).

    It looks like Ventura and Ikepod had a love child and they called it the Apple Watch. The scrolling crown is reminiscent of the Ventura scroll wheel, and the bezel somehow reminds me of Ikepod’s simple design aesthetic. Also a nice touch is the ability to change straps easily and the ability to use your watch to make payments. But it’s still an extension of your phone’s capability. When it becomes an all-inclusive watch/phone then it will be really something.

    Here is my personal take: I think this is a significant event for watchmaking. Young people with no watch will be the early adopters. At a price of $349, its pretty pricey – though the functionality is extensive. The lower tier of watch brands, i.e. watches costing under $500 will DEFINITELY be affected. Unless you’re Nick Hayek SR., you’re not wearing 2 watches simultaneously. I do believe this will get young people interested in watches, but I also believe that brands from Casio to Fossil will be very much affected.

    Furthermore, if the 2014 Hong Kong Watch fair is anything to go by, the Chinese manufacturers are already taking Smart watches super seriously, and see it as a major threat/opportunity.

    I think the Swiss industry at the low end should be VERY WORRIED. The high end will be little affected.

    My 2 cents anyway!

  • Savelli

    thanks Alexander for the opportunity to let us write our opinions on this matter.

    As for me, I do think that it will create a new segment aside the premium range, luxury range within the watch industry and within luxury phones industry.
    I see that markets in Asia as a whole will adopt this wearable technology and set a trend to western markets. I see Russia as well but demographics rule!
    Consumer base in China for fine watches, for example is younger and permanently conncected to their handsets through the multi purpose authorized wechat app and other social forums.
    Technology renders possible to industrialize connected instruments that will be:
    -easily rechargeable that suits urban lifestyle wearers
    -market segmentation within the electronic watch market to suit social status recognition need of the clientele
    -monitoring/sharing wearers activity
    -connectivity eased to their social peers via voice control and even non-invasive implants.

    The watchmaking masters, or prestige range will not be affected as we are speaking of different products.
    Surely not an electronic watch can replace the cratmanship and cutting edge technology involved into theses tiny mechanics.
    not even nano technology. This is anyway a subject on its own and its values shall be even more sought-after, after the coming out of quality connected watches.

    To go further, I see hybrids in the long run combining well knowed labels with a mechanical watch and, as the miniaturization will render it possible, an electronic part of this watch that will offer the services a connected watch can get to the wearer.

    This is a new era for the Swis watch industry and it seems that no one in Switzerland has decided to take up the lead into this unavoidable evolution of consumer’s habit.
    But projects which are underway within LVMH or Swatch Group for example will surprise us!

    • Savelli, there are projects in the pipeline, I have seen several and they are pretty smart. But it makes sense to wait where the technology leaders head to. I as a Swiss would not try to surpass Apple & Co. when it comes to act smart in their proper playground…

  • Mike

    “You never actually own a Patek Philippe. You merely look after it for the next generation”

    Compare and contrast with:

    Apple: “I’m a FanboiOMGLookAtMeImHip!!”

    Hopefully, the iWatch wearers will quickly step up and buy a Swiss watch of some variety. Apple may inadvertently boost the Swiss watch industry in that regard. Anybody know what kind of lifespan expectancy for an iWatch?? I doubt it’ll be passed on from Father to Son…….

    • Amir

      Hahaha!

  • Gregory Phipps

    I’m not so worried about the impact of smart watches. The Swiss watch industry is, however, under tremendous threat and much of it comes from within. They are likely to eat themselves before Apple does so. Among the threats: 1) slow rate of new company creation and reliance on large companies in the value chain for R&D; 2) The virtual monopoly of some components is a huge risk (COMCO decision); 3) Consolidation by the Swiss giants stifles innovation and competitiveness. The fire last Fall at ETA underscores the potential negative impact to the entire industry.

    As a fifteen year venture capital professional and watch collector, I proposed the creation of a Swiss-based venture fund to facilitate and fund new company creation (components and new competitive brands) in the value chain, to Jean-Daniel Pasche at The Federation of the Swiss Watch Industry. He declined to support or endorse the initiative.

    Let’s defer discussion about the significant threat from China to another opinion call. That’s a whole other kettle of fish.

    • Gregory, good comment! Pasche was probably the wrong person to contact. Guys like George-Henri Meylan (MELB-Holding) are the one to contact in such manners…

  • HCE

    First of all let me say that the quote sounds dubious. Some unnamed Apple engineer says he heard Ive saying something about how the Swiss watch industry is in trouble. I wouldn’t put too much credence in this. What are the chances that the engineer quoted this out of context or simply made it up?

    Having said that, let me say that, even if the iWatch is a big success, the Swiss watch industry is relatively safe. A large percentage of Swiss watch revenues come from high-end mechanical watches – so, those customers are not going to be swayed by a high-tech watch, no matter how good. However, I believe that a lot of the mid-priced quartz watches are vulnerable to a successful iWatch launch.

    One other thing which has gone unmentioned so far – I believe that the nation whose watch industry could be in real trouble is Japan. Unlike the Swiss, the overwhelming majority of their business is in the mid-priced quartz segment. Yes, Seiko makes some fine mechanical watches but even for them, the majority of their money comes from mid-priced quartz watches.

    – HCE

    • Thomas

      valid point was not thinking about that.

    • CCN 1410

      A Orient Watch, que pertence à Seiko, tem nos relógios mecânicos a sua prioridade.

  • Jeremy

    This truly is easy to forecast the impact, as I recall a very similar discussion/debate once mobile phones started to become increasing popular. What was the need for an inacurate watch on one’s wrist when they will have a synced time source in their mobile device? A device that can also do much more than simply tell the time. And what was the result? Increasing sales in the luxury watch market. Once one gets passed the obvious superficial correlation, they will realize that these are different markets, different product types.

  • Wow, wow, wow…

    THANK YOU guys for all these good comments, you are great!

    Alexander

  • Steve

    No, the Swiss watch industry is in no trouble.

    The last time Apple was without Steve Jobs, they really tanked so perhaps they ought to be the ones concerned. Wouldn’t be the first time Apple misjudged the market and really took a hit.

    One thing any “smart watch manufacturer forgets is that the size makes them almost totally usable for the average human being, just like the old calculator watch. When was the last time you saw any of those much less anybody wearing one? I would have thought Apple would have learned a lesson from the Shuffle 3 which didn’t sell for trhe same reason as it was pretty much unusable. Which is why the Shuffle 4 resembles a Shuffle 2.

    I’m sure they will sell some to geeky techno junkies but then it will fade.

    I can’t see it being anything more than a curiousity in the future. Sort of like Goggle glass, another thing not many people want but the developer thinks it is the next big thing.

  • Guy

    Seriously? I mean seriously? We are talking apples and oranges. Mr. Ives is paid handsomely to utter marketing bull shit*. Certainly, In the smart wrist app Swatch can team with other platforms like Android for one. Apple as usual can rely on their adoring sycophants to swoon and buy. Baa baa!
    The market is wide open and every major player is in it. If not take Mr. Ives remarks as a shot across the bow.
    *I expect heavy editing here Alexander.

    BTW: I have a blue Sistem 51 as seen on Mr Hayek’s right wrist.

  • Spencer Brannon

    The “idea” that a “smart watch” could even affect the Swiss market is laughable. None of us subscribe to this newsletter or invest in our collection will ever be remotely swayed by the newest fad or digital revolution. If that were the case then we would have all abandoned this interest when the quartz watch came out… Let Apple and Samsung or whomever come out with everything they want, they will never put a dent in the Swiss high end market, ever.

    • As long the iWatch has no crown at “12 o’clock” we are safe 🙂

  • Randall

    There are millions of techno-savy young people that will embrace this technology. However, remember the majority of them don’t wear watches now, they use their phones for time keeping. They will not affect the Swiss watch industry in a negative way as they haven’t thus far and their demographic is quite distant from the typical Swiss mechanical customer. In fact, I think it’s a good thing in the long run as it’s an opportunity for the watch industry to add another profitable sector to the watch business. Mechanical watches are here to stay.

  • Sheldon Smith

    I follow the MacOS and iOS blogs during my commute. I have heard no one state how any of these “smart watches” with touch screen will survive going underwater, function underwater, and, have a crystal/screen thick enough to handle normal outdoor bangs/scratches, yet still work as a touch screen. I also don’t see how a “smart watch” can run days out on the trail, boat, etc without being tethered to some sort of battery or electrical outlet.

    Sure I’ll be wowed on September 9 because of the rumored technological advances, but I don’t see how any of these “smart watches” will replace a reliable mechanical timepiece out in the wild.

  • M

    Stranger things have3 happened, so never say never I guess, but this case, it is like saying that a good photo printer will repace artists / oil paintings. Different markets and buyers. Smart watch, smart phones etc. are wearable technology devices, while an AP, PP, JLC etc, are wearable mechanical art (and science)…2 completely different segments serving different needs.

  • Steve

    They remind me of Tamagotchi toys. Certainly a very profitable fad.

  • Dave

    I don’t think the Swiss watch industry has anything to worry about. Smart watches/bracelets represent a separate sector.

  • Alexander

    The more people, especially men, get used to wearing ANY time-telling-device on their wrist, the better it is for the wohle watch industy. I therefore see it rather positive for the whole industy. And, yes Alexander, I dont see any purchase substitutions.

  • Itai

    Oh my God! Is that what he said? I’m running to sell all my collection!

  • Debashish

    I think Jonathan Ives is trying to draw media’s attention through his statement, as I feel a supposedly smartwatch will never replace a genuine watch.

    These smartwatches are nothing but ultra-hyped gimmicky gadgets, which cannot replace Rolexes, Omegas, JLCs, Piagets, Pateks and others.

  • Remo

    I love mecanical watches and I love Apple products. I think I will wearing 2 watches 😉

    • I might follow you if the iWatch is really cool and useful. Also I am a huge Apple fan I will not wear an iGimmick 🙂

  • Watchaollic

    A mechanical watch is timeless

    Smartwatch will be like smartphones, trendy for a year then replaced by new one

    Nothing sentimental….

    I even think the interest bubble will burst very soon after its launched

  • Glenn villanueva

    These are 2 different niches. Apple may not appeal to a true watch lover. True watches must ‘tick’:)

  • FAlbinMohd

    Dont see that these gadget watches making a threat to real mechanical watches, and definetly not the Swiss. When the quartz showed up in the seventies it representated a revolutionary jump and it affected the other brands which made some shut down but still the mechanicals survived and even excelled. Gadget watches are a hype, different genre, different market for those nerds tech loving android vs apple debators and not for the hand made mechanical watches lovers.
    Whatever time your mechanical watch tells you, its timeless 🙂

  • Roland

    Hi Alexander, you wrote: “I personally think any smart watch will seriously harm the traditional mechanical sector of the Swiss Watch Industry.” But, after I’ve read the entire article, I think, you (like me) actually don’t think so.

  • Norman Plotkin

    I’m an old Mac fan. My first Mac was in 1987. So I really admire the company BUT I can not agree with Ive. Manual and manual automatic watches are in a class by themselves. They will always exist. They are more than just timekeepers. They are exquisite forms of engineering and art. Mr. Ive should know better. Yes, Apple will take some of the youth market. If anything, quartz watches are more vulnerable to lose market share.

  • Tom A.

    To be frank, I am not fully convinced that Ive really said that. He tends to be fully inline with Apple’s secrecy around upcoming products.
    In any case we will know tomorrow.

    My expectation:
    1. if done right (likely in the case of Apple, considering their previous pproduct introductions) I expect an iwatch to be very harmful to the mainly quartz based fashion watch industry.

    2. at the same time I do not see it hurting traditional mechanical watches, even more: I can imagine that young people who often don’t wear a watch at all might be interested in traditional mechanical watches through an iwatch experience.

    We live in interesting times !

  • Sam Ghanouni

    It’s really hard to predict a market considering such controversial matter.
    I would buy a cool smart watch but that doesn’t turn me away from expanding my 18 time piece collection varying from Urwerk to mechanical swatch.

  • Robert Harper

    The new Apple watch will not affect the high-end market but it will take some sales away from Swatch and some other mid-range quartz watches depending on the cost of the Apple watch and what it does. I will not buy one but I am 84 and long wedded to my Rolex Day Date (45 plus years). However, the younger generations are not buying and wearing traditional watches as much other generations have because, as my son and countless others note, they have a Smartphone and it gives them the time and there are clocks everywhere. Most likely the Apple watch will create a new market for watch-like devices in the same way that the iPhone did but some of this market will come at the expense of other watch manufacturers. I suspect but have no real evidence that many of the younger people who buy Swatch watches will opt for the new Apple watch because the jewelry aspect of top quality watches is not on their radar screens anyway. If it were they would not be wearing a Swatch. Additionally they will not know what a Geneva curve is anyway.

  • CCN 1410

    Inertia, Switzerland lost a lot in the 70s and 80s and again left the game turn, no matter new technologies.
    I think the fall will be swift and harsh, not so much for the fine watchmaking, but for small and medium manufacturers.
    Again we will see mass bankruptcy and unemployment in Switzerland and other countries producing conventional watches.
    I have a small collection of watches little value and no Swiss. All watches are great and good American and Japanese origin.
    I think Switzerland slept on our laurels and will pay dearly for their highly inflated prices.
    I’m a fan of conventional watches, but I’m curious to see this watch Apple and enjoyed the Moto 360.

    • Thomas

      Seriously high inflated watch prices of Swiss Made watches. A Patek Philipp or AP is a piece of Art and compared to the Iwatch your grand children and their children can and will wear it. Not sure if anyone will wear an Iwatch in ten years. But then again maybe I m wrong.

  • Thomas

    My opinion a definite NO! Yes Apple is the most or one of the largest companies in Market cap. They have huge amount of cash on the side, but can they scare a 200 year old industry? People want to buy a Breaguet or Patek Philipp because of the hand made tradition and value in those watches (goes for any Swiss Made watch). If someone wants to buy a computer on the wrist then maybe Apple is the choice. Like Mr Hayek said a Swiss watch is about emotions traditions and technical values. Can Apple compete with that?? I am not sure. But it could maybe scare off some Tissot Touch and similar products. But overall those are niche market watches. So the Rolex’s in this world will still make good money after Sep. 9th

  • Arne Herenstein

    Of course Switzerkand will need to follow the times and the market and produce smart watches to stay relevant.. BUT…… The smart watch will never replace the combination of elegance and mechanical engineering complexity.that a quality mechanical watch delivers. I am an information technology professional and may wear a pocket protector from time to time, but the watch I wear is always a mechanical marvel from Switzerland. I am in constant awe of the precision built into it by skilled crafts people. An iWatch is a novelty and a mechanical watch is both history and future

  • Amir

    The Apple designer has to make a bold statement for media attention. I agree with you, that there are separate markets for Swiss mechanical watches and smart watches. There may be some overlap. But no product can ever replace the prestige of a finely made Swiss watch.

  • Jason

    I don’t think apple will produce a bracelet but a proper smart watch that will be updated every couple of years like every other current apple product. Do I think it will harm Swiss watch sales?? Definetly not.As an apple fan I can say that it won’t replace any of my timepieces but may become an addition if it is any good.