Is Swiss Watchmaking Challenged by the Smart Watch?

In the watchmaking industry, the Swiss brands enjoy a certain cachet; watches made under this flag have a reputation for quality, craftsmanship and beauty, and are much sought-after.

However, recent figures from global research firm Strategy Analytics indicate that they may have a challenger – in the last quarter of 2015, Swiss watches were out-sold for the first time by smart watches. Globally, their analysts estimated that approximately 7.9million Swiss watches were shipped, compared to 8.1million smart watches.

The smart watch is a relative newcomer to the field, although computerised wristwatches have been commercially available for much longer than you may think. The first such were released to the market in the 1980s, although their capabilities were much more limited. It is only in recent years, with the advent of new display technologies, better battery life and other technological advances, that they have risen to prominence. The likes of the Apple watch, which quickly became the best-selling wearable device upon its launch last year, have created a new market for technological luxuries.

These watches present an interesting challenge to the watchmaking industry, because they are, for the most part, not made by watchmakers, but rather by technology companies – brands like Apple, Samsung and Sony.

However, it is not the first time that the Swiss watchmaking industry has been challenged by technology pioneered in other areas; in the 1970s, it was the Quartz Revolution that threatened the Swiss way of watchmaking.

Japanese company Seiko made the world’s first quartz watch in 1969, and although the first Swiss quartz analog watch arrived at the Basel fair in 1970, the change was not widely embraced by Swiss brands, allowing Japanese and American watchmakers to enjoy ascendancy. From dominating the market prior to the 1970s, the Swiss industry declined to a fraction of its former size, and many brands struggled well into the 1980s.

This time, the industry may be better prepared for the advances of technology. Although their sales are only a small fraction of the smartwatch market, several Swiss brands are already making their mark here.

TAG Heuer met an unexpected level of demand for their Connected watch, which sold out on pre-orders for its first shipments, and expect to have a quarter of a million Connected watches in production over the next year, whilst Alpina’s smartwatch has been proving itself in extreme conditions as the official timepiece of the Ice Legacy project. Breitling’s B55 Connected watch, launched just a couple of months ago, is targeted more specifically at pilots but has also met with positive praise.

How the industry fares against this new challenge – and indeed, whether smart watches are here to stay or merely a flash-in-the-pan trend – remains to be seen, but we anticipate many exciting developments along the way.