The Assassination of the Swiss Watch Industry by the Coward Apple

[shaunylw]

I don’t disagree, i think the demand in 50 years for a mechanical watch will obviously be limited. the way technology is going, the Apple Watch or a device like it, might run your entire life. No car key, no need for a phone, no wallets, etc. But the industry will adapt, as it did during the quartz crisis. Either way, I’ll be 94 and my biggest concern if I’m alive will be finding a restroom.

I do agree with what others have mentioned, Apple Watch in our current time is good for the Swiss watch industry. For most people, you buy a Rolex and that’s your nice watch. If you buy an Apple Watch, it doesn’t break the bank and now you’re bringing non watch wearers into these larger luxury brands.


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[grimps]

The Apple watch has been out for a number of years now , during that time Swiss watch makers have been making record profits.
In the UK Watches of Switzerland recorded record profits last year and I believe they don't sell Apple watches

[Fleetlord]

Originally Posted by Chewbacca

Good thread. Thanks OP.

As a business case, the video isn’t wrong. It’s all available data and even Swiss executives have been saying smart watches are a threat in the <$5k range. What’s interesting to me is why companies like Rolex don’t simply crank up the price, now, and are instead pissing off many loyal ambassadors and collectors by throttling production or allowing ADs to own a failing relationship with a back door to new resellers.

Simply double the prices yesterday, and go ultra premium and you solve so many issues and set the tone. Because having an ‘intro’ priced Rolex is an intro to nothing if your market isn’t being replaced, there’s no watch to buy, and nobody even cares.

Rolex has the bank to ride any waves for a decade and it’ll be better in the end.

It’s mind blowing how they’re messing this up.

Rolex raised prices dramatically in the early to mid 2000’s and it wasn’t a good thing. Watches were selling well below retail on the secondary market, product congesting showcases to the point dealers “dumped” less desirable Rolexes to the greys at ghastly discounts. It was great for the WIS, but trashy for the brand.
Currently the “concept” of less desirable Rolex doesn’t even compute.

Besides the perception of exclusivity, the market demands high resale retention or appreciation. The relatively low retail prices from Rolex allow a desirable secondary market delta to be achieved/ maintained and FOMO frenzy to take over.

This very simple strategy has driven the streetwear market to the moon. It just flat out works. Some of the in tune luxury brands are just following suit.

On the flip side, look at poor Panerai. They were red hot when they had lower retails and less production. Of course, to capitalize on this, they raised prices and made lots more watches. How can that go wrong? Well their current market share of 1.9% says it all. Undesirable because they are too expensive at retail and depreciate too much. Bummer, but that’s how it goes.

[Kevin of Larchmont]

Originally Posted by Fleetlord

On the flip side, look at poor Panerai. They were red hot when they had lower retails and less production. Of course, to capitalize on this, they raised prices and made lots more watches. How can that go wrong? Well their current market share of 1.9% says it all. Undesirable because they are too expensive at retail and depreciate too much. Bummer, but that’s how it goes.

Spot on. The hunting for used Panerai is good these days, they are the poster child for how not to run a brand.

[Dirt]

I understand that it's possible for the Apple to become a stepping stone to something more substantial as a timepiece for those who will eventually progress to it.
The fact remains the Apple would not survive where a real watch may at the extreme end of the usage spectrum.
Both can co-habit in their own space within the broad existence of some people's lives. Not mine at this point in time
I do know my Wife literally hates her Apple and resents the fact she had to buy a phone to make it work as required. She will put her DJ 31 on in preference whenever possible.
I fully anticipate the Apple will be relegated to the sock drawer once she overcomes her health condition which she bought the Apple to monitor. It does that exceptionally well.
She currently works in health and it seems that most who wear an Apple in her field are mostly doing it for tracking health conditions.

One other area where Apple are excelling is one can go into an Apple store and pick up what they want straight away. Even if it's a choice of the best combination of the least appealing thing to ever be strapped onto a wrist.

[Andad]

Apple Watch Yearly Sales:

2015 8.3 million
2016 11.9 million
2017 12.8 million
2018 22.5 million
2019 30.7 million
2020 43.1 million

[Krash]

While Apple Watch sales soar, Rolex demand is so great, that it’s virtually impossible to acquire one.

It’s literally Apples and Oranges; 2 different products altogether. People are buying the Apple Watch, but sales of luxury Swiss Made watches don’t seem to be affected. At least not yet.

I think there are 3 types of Apple Watch buyers.

1) people like me that love Swiss made mechanical watches, will continue to buy Swiss Made watches, and also have an Apple Watch.

2) people that wouldn’t buy a luxury Swiss Watch to begin with anyway, but they buy an Apple Watch. This group is mostly made up of folks that really can’t afford a luxury Swiss made watch anyway, so there isn’t any market displacement.

3) people that would have bought a Swiss Made watch but decided to get an Apple Watch instead. These folks have the financial wherewithal to buy luxury Swiss Made watches but consider an Apple Watch to be a huge technological advancement. You often see these folks on the internet bragging about their Apple Watch and mocking old school Swiss Made mechanical watches.

The threat is comes from the third group, but it’s not clear how much of a threat they really are.


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[FHFinster]

Originally Posted by samson66

This topic comes up all the time. People fail to realize that before the smart watch came out, young people weren't wearing ANY watches on their wrists. What Apple has done is make it "normal" again to wear a wrist watch. A certain percentage of these young people who wear smart watches will mature and have higher incomes and will ultimately decide they want something more luxurious to wear. That brings them into the Swiss watch market. Many of these people in my opinion would never have even thought about getting a Rolex if they hadn't owned an Apple watch first. In the end we may be saying Apple SAVED the Swiss watch market rather than destroying it. Just look at what's happening right now with Rolex for early evidence of this. Upper end luxury watches are as popular as ever. It's the low end that's going to suffer. I don't think Rolex, Omega, PP and others have anything to worry about. Lower priced stuff is another story...

My thoughts exactly.


Fin

[GeoffEff]

Originally Posted by Krash

While Apple Watch sales soar, Rolex demand is so great, that it’s virtually impossible to acquire one.

It’s literally Apples and Oranges; 2 different products altogether. People are buying the Apple Watch, but sales of luxury Swiss Made watches don’t seem to be affected. At least not yet.

I think there are 3 types of Apple Watch buyers.

1) people like me that love Swiss made mechanical watches, will continue to buy Swiss Made watches, and also have an Apple Watch.

2) people that wouldn’t buy a luxury Swiss Watch to begin with anyway, but they buy an Apple Watch. This group is mostly made up of folks that really can’t afford a luxury Swiss made watch anyway, so there isn’t any market displacement.

3) people that would have bought a Swiss Made watch but decided to get an Apple Watch instead. These folks have the financial wherewithal to buy luxury Swiss Made watches but consider an Apple Watch to be a huge technological advancement. You often see these folks on the internet bragging about their Apple Watch and mocking old school Swiss Made mechanical watches.

The threat is comes from the third group, but it’s not clear how much of a threat they really are.


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Couldn't agree with this more. My age group (millennials born in late 80s early 90s) seem to wear apple watches or other smart watches but would never say no to a Rolex also. It may be just status too but my close group of friends and family who aren't into timepieces still appreciate a fine Swiss piece.

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[HiBoost]

Originally Posted by shaunylw

Either way, I’ll be 94 and my biggest concern if I’m alive will be finding a restroom.

Originally Posted by Krash

I think there are 3 types of Apple Watch buyers.

1) people like me that love Swiss made mechanical watches, will continue to buy Swiss Made watches, and also have an Apple Watch.

2) people that wouldn’t buy a luxury Swiss Watch to begin with anyway, but they buy an Apple Watch. This group is mostly made up of folks that really can’t afford a luxury Swiss made watch anyway, so there isn’t any market displacement.

3) people that would have bought a Swiss Made watch but decided to get an Apple Watch instead. These folks have the financial wherewithal to buy luxury Swiss Made watches but consider an Apple Watch to be a huge technological advancement. You often see these folks on the internet bragging about their Apple Watch and mocking old school Swiss Made mechanical watches.

I would argue that #2 isn't accurately defined. I see the Apple watch as a luxury item itself. It is an expensive product (considering it is a throwaway device which cannot be serviced, is guaranteed to become obsolete, and it costs as much as a decent 65" TV). It is, like all Apple products, targeted at the upper middle class and beyond.

But here's the key point - I bet if you polled purchasers of this device, literally the last reason they'd give for buying it is "telling the time". This group largely includes the "why do I need a watch when I have my phone?" crowd. They buy the Apple "watch" because it gives them a mini phone on their wrist, not because it's a watch.

So in terms of ensuring future generations of "real" watch customers, this group is the one that needs the most targeting. They need to be shown that getting all that noise off your wrist and focusing on the simple pleasure of time telling is a benefit, not a limitation.

[Krash]

Originally Posted by HiBoost

I would argue that #2 isn't accurately defined. I see the Apple watch as a luxury item itself. It is an expensive product (considering it is a throwaway device which cannot be serviced, is guaranteed to become obsolete, and it costs as much as a decent 65" TV). It is, like all Apple products, targeted at the upper middle class and beyond.
.

Yes and no.

There are different degrees of luxury. Apple Watches sell for $300 to $800 depending upon configuration.

That’s definitely a luxury item for the masses, but it’s not in the same category as a Rolex. Not even close.

It’s not even in the same category as a Tudor, Nomos or Tag Heuer.


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[HiBoost]

Originally Posted by Krash

Yes and no.

There are different degrees of luxury. Apple Watches sell for $300 to $800 depending upon configuration.

That’s definitely a luxury item for the masses, but it’s not in the same category as a Rolex. Not even close.

It’s not even in the same category as a Tudor, Nomos or Tag Heuer.


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Agree to disagree :) I say you can't compare it dollar for dollar because of the expected life of the item. Just as $100k is cheap for a house, but expensive for a car. Likewise, $800 for a product that is worthless in 5 years is arguably more "extravagant" than $5000 for a product that can still be in use (and almost certainly worth even more) in 50 years.

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[duquephart]

Originally Posted by Krash

While Apple Watch sales soar, Rolex demand is so great, that it’s virtually impossible to acquire one.

It’s literally Apples and Oranges; 2 different products altogether. People are buying the Apple Watch, but sales of luxury Swiss Made watches don’t seem to be affected. At least not yet.

I think there are 3 types of Apple Watch buyers.

1) people like me that love Swiss made mechanical watches, will continue to buy Swiss Made watches, and also have an Apple Watch.

2) people that wouldn’t buy a luxury Swiss Watch to begin with anyway, but they buy an Apple Watch. This group is mostly made up of folks that really can’t afford a luxury Swiss made watch anyway, so there isn’t any market displacement.

3) people that would have bought a Swiss Made watch but decided to get an Apple Watch instead. These folks have the financial wherewithal to buy luxury Swiss Made watches but consider an Apple Watch to be a huge technological advancement. You often see these folks on the internet bragging about their Apple Watch and mocking old school Swiss Made mechanical watches.

The threat is comes from the third group, but it’s not clear how much of a threat they really are.


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There are also those who just want to know the time. You don't need precious metals, gem stones and cluttered dials ro do that.

[t65tampa]

The Apple Watch is now the “tool” watch of the modern era, whereas mechanical timepieces are statement accessories and artwork for the wrist.

I love every piece in my watch collection, but I can’t answer a text while I’m out swimming at the beach using a Rolex.

Fine timepieces won’t be affected with technology like an Apple Watch. If that were the case, we’d all be wearing Oysterquartz!


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[Ganymede]

Originally Posted by Krash

Yes and no.

There are different degrees of luxury. Apple Watches sell for $300 to $800 depending upon configuration.

That’s definitely a luxury item for the masses, but it’s not in the same category as a Rolex. Not even close.

It’s not even in the same category as a Tudor, Nomos or Tag Heuer.


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I seriously doubt Apple sells many $800 watches. Remember: this is a device that becomes obsolete in two to three years, and outright unusable in 5-6 years as it can no longer accept updates.

Your Rolex is immune to obsolescence.

[Krash]

Originally Posted by Ganymede

I seriously doubt Apple sells many $800 watches. Remember: this is a device that becomes obsolete in two to three years, and outright unusable in 5-6 years as it can no longer accept updates.

Your Rolex is immune to obsolescence.

I never said they did. I just listed the price ranges. I do agree that they sell a lot more at the cheaper range than the higher range.


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[Mendota]

Originally Posted by HiBoost

I would argue that #2 isn't accurately defined. I see the Apple watch as a luxury item itself. It is an expensive product (considering it is a throwaway device which cannot be serviced, is guaranteed to become obsolete, and it costs as much as a decent 65" TV). It is, like all Apple products, targeted at the upper middle class and beyond.

But here's the key point - I bet if you polled purchasers of this device, literally the last reason they'd give for buying it is "telling the time". This group largely includes the "why do I need a watch when I have my phone?" crowd. They buy the Apple "watch" because it gives them a mini phone on their wrist, not because it's a watch.

So in terms of ensuring future generations of "real" watch customers, this group is the one that needs the most targeting. They need to be shown that getting all that noise off your wrist and focusing on the simple pleasure of time telling is a benefit, not a limitation.

My 79 year old mom bought hers specifically so that she can answer the phone while reading her iPad without having to get up and go across the room to grab the phone. Gadgetry, apps, checking email and news/weather, and all of that other stuff is handy but that is secondary to the pure novelty of the convenience aspect. Her Cartier gets less wrist time around the house due to this, but the Cartier still gets worn out and about - basically whenever there isn't a need for the phone to be paired with it. I mean, if it wasn't being used for the specific purpose in that moment, I wouldn't wear it either. I would wear my Rolex for all other occasions.

[Krash]

Originally Posted by HiBoost

Agree to disagree :) I say you can't compare it dollar for dollar because of the expected life of the item. Just as $100k is cheap for a house, but expensive for a car. Likewise, $800 for a product that is worthless in 5 years is arguably more "extravagant" than $5000 for a product that can still be in use (and almost certainly worth even more) in 50 years.

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You and maybe a couple other folks on this forum might think that way. General population most certainly does not view an Apple Watch as being in the same category as a Rolex in terms of luxury.


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[HiBoost]

Originally Posted by Krash

You and maybe a couple other folks on this forum might think that way. General population most certainly does not view an Apple Watch as being in the same category as a Rolex in terms of luxury.


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Not to beat this to death, but the main point I was trying to make is there are tons of people who have no interest in a Rolex but it has nothing to do with whether they can afford it and everything to do with them just not caring about traditional watches. I have friends with very expensive cars, big houses, boats, RVs, etc but they literally think anybody who would spend more than $500 on a watch is an idiot.

Maybe the best way is to just say there is a 4th group in addition to your 3. And I believe it's a rather significant one in terms of size.

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[Krash]

Originally Posted by HiBoost

Not to beat this to death, but the main point I was trying to make is there are tons of people who have no interest in a Rolex but it has nothing to do with whether they can afford it and everything to do with them just not caring about traditional watches. I have friends with very expensive cars, big houses, boats, RVs, etc but they literally think anybody who would spend more than $500 on a watch is an idiot.

Maybe the best way is to just say there is a 4th group in addition to your 3. And I believe it's a rather significant one in terms of size.

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I see what you’re saying.

I think I have those folks covered in both category #2 and #3.

For number 2, I said these people wouldn’t buy a Swiss watch anyway and are mostly people that couldn’t afford one, but this also includes people that could afford one too.

For number 3, I mentioned these people have financial wherewithal to buy a Rolex, but just prefer the Apple Watch instead.


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[Chester01]

I do not think Apple is a Coward. They are making tools that people use. Period. If folks find value in that good for them. The ability to take the Apple watch out leaving the bulky cell phone at home is an advantage.

Now luxury good have been around for a while and while the Apple watch is in my opinion a tool watch as the Sub once was, they are disposable and what Rolex and others offer are a meaningful watch that can be kept a lifetime. Some of us, myself included are not happy about being turned into Pavlov's dogs and the constant screen time, checking , etc... is really creating dopamine addicts. But the fact that Rolex can be an heirloom quality watch is why I frequently offer folks the advice of not flipping their Rolex. The reality is the more we flip, the less meaning the Rolex has and the more it resembles an apple watch.

I dont see Rolex going anywhere anytime soon, but I know many, many folks that can easily afford a few Rolex watches and they opt for the Apple watch. I also think while Rolex has always been equated with quality robustness, their (intentional or not) linking their wagons to run away capitalism, being only available for oligarchs is not attractive. Their history is fading into the background, and most only see them as items to flip, status symbols, ways to flaunt wealth, $$$, and a place to park some dough. I mean to some degree, Rolex is coming with more and more baggage and who is really comfortable with the baggage these days? Not me.

[gerry100]

Originally Posted by 2loaded

Brilliant

Correct!

[jcatral14]

Jewelry has been around forever and luxury watches are jewelry so I have no reason to believe they will go away.

[watchwatcher]

Before clicking on this thread, it is my considered opinion that the instance of actual facts lurking on YouTube is relatively low.

My opinion remains unchanged.

But, thanks for sharing.

[richard371]

IMG_2735.jpg

[Robf52]

Originally Posted by samson66

This topic comes up all the time. People fail to realize that before the smart watch came out, young people weren't wearing ANY watches on their wrists. What Apple has done is make it "normal" again to wear a wrist watch. A certain percentage of these young people who wear smart watches will mature and have higher incomes and will ultimately decide they want something more luxurious to wear. That brings them into the Swiss watch market. Many of these people in my opinion would never have even thought about getting a Rolex if they hadn't owned an Apple watch first. In the end we may be saying Apple SAVED the Swiss watch market rather than destroying it. Just look at what's happening right now with Rolex for early evidence of this. Upper end luxury watches are as popular as ever. It's the low end that's going to suffer. I don't think Rolex, Omega, PP and others have anything to worry about. Lower priced stuff is another story...

Well said. Apple and smart watches could be the gateway to the wearing of more sophisticated, mechanical watches, and Rolex would be in that sweet spot.

[ricardo-sf]

i find it a little funny that there is even a discussion comparing luxury mechanical watches vs the smart watches.

they are nowhere close to being related in any way, and there is zero overlap in one market vs the other.

i dont even think that there is a gateway effect. -- few people go from spending a few hundred dollars on a trinket, to then having to navigate the PITA hurdle field to be able to get a Rolex from an AD, much less spend 10k, 15k, or more on a jewelry item, unless thats something they were already into.

[dtwer]

Originally Posted by PhilippeD

"Apple sold more watches than Rolex, Cartier, etc. combined. I believe there is strong evidence that traditional watches will be dead in fifty or twenty years."

I stopped watching after that last sentence.

It's like saying "Volkswagen sold more cars than Ferrari, Porsche, and Bentley combined so I believe there is strong evidence the luxury car market is dead in fifty or twenty years."

Good analogy.

In this day and age where everybody with a webcam can upload their opinions to the internet, people with their simpleton logic do more damage to dumb people down than those with none.

[Kevin of Larchmont]

Originally Posted by ricardo-sf

i find it a little funny that there is even a discussion comparing luxury mechanical watches vs the smart watches.

they are nowhere close to being related in any way, and there is zero overlap in one market vs the other.

i dont even think that there is a gateway effect. -- few people go from spending a few hundred dollars on a trinket, to then having to navigate the PITA hurdle field to be able to get a Rolex from an AD, much less spend 10k, 15k, or more on a jewelry item, unless thats something they were already into.

The gateway effect might be as simple as training people to look at their wrists.

[Kevin of Larchmont]

Originally Posted by Chester01

But the fact that Rolex can be an heirloom quality watch is why I frequently offer folks the advice of not flipping their Rolex. The reality is the more we flip, the less meaning the Rolex has and the more it resembles an apple watch.

Brilliant. The part about the dopamine addicts was good too.