Apple has fine form in making “geek” chic – but can luxury Swiss brands pull off the same trick in the high-tech era of the smartwatch?
Whatever time-zone you are in, it would have been difficult to avoid the ongoing frenzy over the Apple Watch, which launches on April 24 in nine countries including the United States and Japan, but not yet in the UAE.
Consumers face long waiting times for the gadget, which ranges in price from US$349 for the basic version to a staggering $17,000 – the same ballpark as some high-end Swiss watches – for the bling-bling model.
In a sign of the US tech firm’s emergence as a luxury brand, the most expensive Apple Watch – which comes in gold with a red leather strap – is already sold out and unavailable until August.
Ben Wood, the chief of research at the UK-based market-analysis firm CCS Insight, forecasts that Apple will sell 20 million watches by the end of the year.
But that could, counterintuitively, be a good thing for Swiss watchmakers, many of which trace their history back more than a century.
“Apple Watch without a doubt will be the must-have piece of gadget bling for 2015,” says Mr Wood. “And it is wonderful news for all watchmakers.”
The arrival of the Apple product will make watches cool again – and boost demand for high-end, exclusive timepieces produced by Swiss brands, says Mr Wood. But the less exclusive Swiss brands could suffer, he warns.
“The high-end Swiss watches – the Patek Philippe, Rolex and the Bulgari – are in a class of their own,” he says. “But certainly the mid-market for luxury watches is going to feel the pinch. Apple definitely is well-positioned to take a pop at companies like TAG.”
Perhaps wary of this TAG Heuer, which did not respond to a request for comment, is one of several luxury watchmakers scrambling to launch their own “connected” watches.
The stakes are high for such brands in the Middle East, where 3 million Swiss watches were imported last year. The UAE ranks as one of the top 10 markets for Swiss watches, with demand up 8.9 per cent last year, when imports totalled more than US$1 billion, according to industry data.
Bulgari was one of several brands to launch an “intelligent” watch concept at last month’s Baselworld watch show in Switzerland. Its Diagono Magnesium looks like a normal mechanical watch but incorporates a near field communication (NFC) chip that can interact with a smartphone app.
Jean-Christophe Babin, the chief executive of Bulgari, believes Apple will help, rather than hinder, sales.
“As Bulgari, we don’t feel a threat from the Apple Watch,” he says. “The entry of Apple will create a new market. I’m not sure it will compete against the existing luxury watch market, except perhaps for the low end.”
Another Swiss answer to the smartwatch on show at Baselworld was the Frédérique Constant Horological Smartwatch, which starts shipping in June at €950 (Dh3,699).
Billed as “the bridge between Silicon Valley and the Swiss watch industry”, the timepiece has no digital screen and all the classical looks of an analogue Swiss watch. The only clue to its “smart” nature is an analogue dial on the face, which tracks both your physical activity – the number of steps taken in proportion to a pre-set goal – and sleep patterns, with all the information synched to a smartphone app.
Annabel Corlay, a public relations assistant at Frédérique Constant, says the smartwatch will be made available in the UAE and wider Middle East, and that “demand will be new and big”.
The Swiss watchmaker Breitling – already known for its use of technology – has also entered the smartwatch race.
Its B55 Connected model, which it plans to launch by the end of the year, including in the Middle East, has no electronic screen but can be paired with a smartphone to upload various measurements, such as flight timings.
Jean-Paul Girardin, the vice president of Breitling, says the price of the B55 has not been set but is likely to be “a little more” than its Cockpit B50 models, which sell for about $8,000.
“We didn’t try to put a less effective smartphone on the wrist. But we used the user-friendliness of the smartphone to enhance the functionality of the watch,” says Mr Girardin.
He, too, believes the Apple Watch is not a threat – and says that, given the declining interest in wearing watches, the new product should actually boost interest in timepieces.
“We haven’t talked so much about wristwatches in a long time,” he says.
The rival brand Gucci announced at Baselworld it will develop a “smartband” with the American rap singer Will.i.am, which features an electronic display with functions including phone calls, emails and music. Other brands, including Hermes and Patek Philippe, however, have said they have no plans to launch smartwatches.
Aside from Apple, the Swiss brands also face competition from new companies such as Kairos Watches, which makes “hybrid” timepieces that superimpose graphical notifications over a traditional mechanical face.
The firm – which was founded in South Korea in August 2013 – says the watches will ship in May.
The pre-order price ranges from $549 to $1,249 – and has so far yielded more than $2 million in orders – while the retail prices for the two key models start at $1,199 and $2,389 from launch.
Sam Yang, the chief executive of Kairos, says the watches will be available in the UAE and wider Middle East when the firm signs a local distributor.
He says one crucial feature of Kairos watches is that they will not become obsolete because the electrical smartwatch components can be replaced as technology matures.
“Owners of the Hybrid Mechanical Smart Watch won’t need to buy a completely new watch with each new generation of technology,” he says.
And that is a feature the Apple Watch cannot yet boast. For, despite the hefty price tag of the top models, the US firm’s watch has what Mr Wood describes, as “built-in obsolescence” – they are disposal, like old iPhones.
“It’s not going to be something that’s going to be an heirloom – whereas the Patek Philippe, Bulgari and Rolex are, amazingly, items that even increase in value over time. And that’s definitely not going to happen with the Apple Watch,” says Mr Wood.
But will that stop more consumers queuing up to drop a cool $17,000 on a watch that will soon be out of date?
Only time will tell.
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