Elmar Mock: Apple Watch Threat to Swiss Horology

Ornatus-Mundi · 2015-03-10T16:08:28Z

Elmar Mock, Swatch co-inventor, warns the Swiss watch industry about the Apple Watch's threat. Explore expert opinions on smartwatches vs. luxury mechanical watches.

Ornatus-Mundi

WPS member · Horological Meandering forum

77 replies24297 views2 photos

Elmar Mock, co-inventor of the Swatch, offered a stark warning to the Swiss watch industry in 2015, predicting an 'ice age' due to the Apple Watch. Ornatus-Mundi's post highlights Mock's concerns about industry arrogance and the potential for Apple to dominate the lower to mid-price watch market, drawing parallels to the quartz crisis. This discussion remains relevant as smartwatches continue to evolve and challenge traditional horology.

According to a (very informative and well written) report published today at bloomberg.com, Elmar Mock, co-inventor of the Swatch and one of the most important figure in the Swiss watch industry (and Prix-Gaia laureate), offered dire outlook on the Swiss watch industry amidst the imminent launch of the Apple Watch. The reason according to Mr Mock: arrogance!

According to the keynote presentation of Tim Cook on Monday, the Apple Watch will come in three version, covering three important price brackets (and thus market ranges):

- Apple Watch Sport (aluminium) starts at $349

- Apple Watch (stainless steel) just over $1,000

- Apple Watch Edition (18 ct. gold) begin at $10,000

While the latter being a special piece to be sold in a very limited quantities, the remaining volume models occupy a niche where over 90% of the Swiss watch production (in terms of volume) resp. 40 % of the value is sold.

And, as Mr Mock says, anything in this price bracket really is in danger. To put this in numbers: Apple is expected to sell 20 to 30 million watches in the first year. Switzerland's watch exports in 2014 were close to 30 million. In other words, already in the first year Apple will sell as many watches as entires Switzerland!

Mock further recalls the "quartz crisis" of the 1970s and 1980s, where the Swiss industry totally misjudged the impeding threat posed by cheap Japanese quartz watches, ultimately resulting in the loss of more than 60.000 jobs in the watch industry.

"So far I see watchmakers in this country making the same mistakes as back then," Mock said. "We've seen a lot of arrogance in the Swiss watch industry in the past few years, calling the smartwatch a gadget and not taking it seriously."

Tough times ahead, but the Swiss have not yet lost the case if "the top managements of the companies will react accordingly", Mock adds.

Personally, I think he has a point. Not having had a personal experience with the Apple Watch I won't be further going into the utility of a smart wearable, its appeal to watch collectors or its long time value, However, I can safely say that the traditional watch industry, particularly in the lower to mid price range, got they wake-up call on Monday: If it is not for technology, than at least for case construction. Having seen what Apple can offer in terms of materials innovation, design and (supposedly) quality (the new aluminium and the high-tech gold), then I have to say: one gear (at least) up, please!

Cheers,

Magnus

This message has been edited by Ornatus-Mundi on 2015-03-10 16:09:09 This message has been edited by Ornatus-Mundi on 2015-03-10 16:11:07

Key Points from the Discussion

Mechanical watches are luxury items, and a utilitarian device like the Apple Watch cannot displace them in that segment. The quartz crisis already pushed mechanical watches into the luxury bracket, and the industry survived that shift.
The Apple Watch represents a new watch concept, and its long-term impact is underestimated. Smartwatches could become the norm for those who want to be 'modern,' potentially making mechanical watches seem like relics, especially if smartwatches gain celebrity endorsements.
The Apple Watch is not revolutionary; it's a miniature iPhone for the wrist, similar to how Casio and Pulsar digital watches were novelties years ago. Its 'revolutionary' aspect lies more in advertising and consumerism than in groundbreaking technology.
Smart wearables have the potential to fundamentally change how people use wrist devices by interacting with surroundings and bodies, unlike quartz watches which were merely a cheaper way to power a watch. The challenge for Apple is to make these devices feel essential.
Many consumers buy Swiss watches as status symbols, a function an Apple Watch could also fulfill. The industry's complacency regarding smartwatches is a significant concern.
Digital photography's impact on film was not just about pixels but about changing consumer behavior through convenience like instant review and easier sharing. Smartwatches could similarly change how people interact with wrist devices by offering new conveniences.

The Discussion

Sandgroper

Mar 10, 2015

Very interesting, although I would agree with the fact that the Apple Watch is a gadget, what else would it be? However, gadget from Apple have a good track record for selling like hot cakes and I believe it to be much easier for a company like say, Swatch, to incorporate smartness in their line of watches than for Apple to start manufacturing mechanical watches. History has shown over and over that once on top, an individual, a company or a country for that matter, tends to become arrogant and

ThomasM

Mar 10, 2015

our ABR case and the ikepod strap... There will be repurcussions for the sub-$1k market, no question. for watchgeeks and "WIS" I'm not so sure... interesting food for thought. TM

CaliforniaJed

Mar 10, 2015

Consider this: despite increasing Swiss production, I suspect in many (most?) markets the number of people who wear a watch at all has declined year over year for some time. (Perhaps someone has that data?). If in fact Apple sells 30m watches, or even puts behind their efforts the marketing muscle to sell such a number, imagine the awareness that will build among consumers with respect to wristwatches, generally. That is not something for a watchmaker to fear. That, my friends, is an opportunity

ThomasM

Mar 10, 2015

conversation about the fact that the iWatch is sold without a strap. One side was really whipped into a frenzy - "how much for a strap?!?" the other side was saying, "you don't understand. just imagine the ecosystem that will develop around the strap business...all promoting the iWatch." interesting alternative views...

Sandgroper

Mar 10, 2015

..I have just read this article and wanted to share in order to keep things in perspective. Wow! US$ 17'000.00 for an Apple watch? I'll get a tree here for much less than that:) Please delete if posting this link is blasphemous! Cheers Francois

Goldenlutin

Mar 11, 2015

The Swiss industry just don't sell electronics nor great software but luxury goods. How do you want any Swiss brand to compete in this field and with these volumes? It make just no sense to compare both. Cheers, Goldenlutin

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