The biggest watch story last year wasn’t a new Rolex or Patek Philippe. It didn’t come from Europe, or even Japan. For the first time ever, the biggest noise in watches – or perhaps wristwear – was a smartwatch, as Apple released its much-hyped timepiece in April.
The hot new category’s buzz had, of course, been growing for a while; both 2013 and 2014 were hailed as “the year of the smartwatch”. In fact, Apple lifted the lid on its badly kept secret back in September 2014, and seven months of feverish speculation about its game-changing potential duly followed. Given the California company’s track record, it didn’t seem unrealistic to predict that the Apple Watch would start a revolution, sweeping “dumb” watches aside.
Meanwhile in Switzerland, brows were furrowed and meetings held. The last time the Swiss watch industry came face-to-face with the Terminator-like march of technology, it was on the receiving end of a generation-defining pummelling that bankrupted brands and put thousands out of work. The so-called Quartz Crisis – always capitals – was precipitated by Seiko’s development in 1969 of accurate and affordable quartz movements (these days, anything with a battery), which flooded the market with cheap alternatives to mechanicals. The industry fell to its knees for a decade.
And even though smartwatches aren’t quite coming out of nowhere like quartz did, the fast-moving tech industry could still rock Switzerland on its heels. What if Apple really did sell 40 million watches in its first year, as analysts predicted? “It is similar to the Quartz Crisis in a way,” says Andre Bernheim, CEO of Mondaine. “But we all know it’s not the end. Some people will always just want a watch.”
Changing times
The way the watch industry got back on its feet in the Nineties wasn’t by competing with quartz. Not only did it adopt the technology to produce affordable, mass-market watches but, crucially, it also took the opportunity to draw a distinction between battery-powered and mechanical movements, enabling it to market the latter as a high-end luxury. In 1960, mechanical watches were the only kind; by 2000 they had become aspirational. Trading on heritage, their very anachronism became their USP.
Logic might hold, therefore, that luxury watchmakers needn’t jump on the smart bandwagon. After all, how can a device costing a few hundred bucks, with two years’ lifespan, threaten a watch worth thousands that could outlive you?
Nevertheless, wagon-boarding began this year in earnest, as brands rushed to announce a smart or “connected” watch. The approaches fall broadly into two camps. On one side, there are those with something “smart” attached to the strap: all of the “proper” watch quality and easily upgradeable, but with limited functionality. Then there are those incorporating tech into springs ’n’ gears models: nicer-looking and more capable, but with a shortened half-life.
Montblanc broke cover first, debuting its e-Strap Bluetooth module. The consortium of Frédérique Constant, Alpina and Mondaine unveiled watches with activity trackers and sleep monitors (FC coining the phrase “horological smartwatch”). Breitling launched the B55 Connected for pilots, able to store and track flight data. Bulgari put a communication chip in its Diagono to create the Magn@sium, a watch able to provide cyberworrier oligarchs with secure access to their e-vault. IWC flashed a glimpse of Connect, a button-like addition to the strap of a Big Pilot. Yet to be seen in the flesh, its functions remain elusive.
Last but not least, TAG Heuer announced a partnership with Google and Intel, a move that may yet prove the savviest of all (if you can’t beat ’em . . . ) The consensus among insiders – most of whom preferred not to be quoted for this article – is that many more firms have a smartwatch in the pipeline for 2016.
Early adopters
It’s always tough to be first – something Apple knows only too well, letting others test the water before making its splash. It’s also easy to spin these early Swiss countermoves both ways: the long gap between announcement and availability could be interpreted as controlled or cautious, as could the lack of PR hype in the interim. Seeing the products up close, there exists a slight but perceptible lack of polish in some cases, one that contrasts poorly with the brands’ traditional wares. Bremont chairman and luxury biz entrepreneur John Ayton concedes that these offerings were, on the whole, “a bit underwhelming”. “But that’s not to say the next ones won’t be better,” he adds. “The iPad was ridiculed when it came out, and I can’t say I find the Apple Watch particularly pleasing, but tastes can change. However, I’d be surprised if luxury brands try to compete on the same product life cycle as tech ones. We’re never going to be at the forefront of technology, but we still have to recognise it.”
Those manufacturers that have already launched smartwatch hybrids – such as Breitling – insist they’re in it for the long haul: “We know the smartwatch can’t compete with the phone for user-friendliness,” says the brand’s VP, Jean-Paul Girardin. “But the next connected Breitling will do more. We’re improving the interface and power requirements as well as adding functions. It’ll be a more complete package.”
Then there’s the issue of cost. It makes sense for smartly priced fashion brands such as Guess and Gucci to follow the trend, with Connect (which allows voice control of your phone, among other things) and Smartband (designed with will.i.am to make your phone obsolete) respectively. But does the luxury end need concern itself with such things?
Wrist and reward
According to Jens Henning Koch, executive vice president of marketing at Montblanc, “luxury is a combination of heritage, craftsmanship and exclusivity. It’s a challenge for tech companies to imitate that.” Montblanc’s e-Strap is a tentative toe in the smartwatch waters, one that recognises the risk of making a timepiece that dates too quickly. “We want Montblanc watches to be lifetime companions; our smart products will come out every 18 months to two years,” says Koch. “We’re not planning to put tech into watches. But we have to provide products for the contemporary achiever – we have to have a strong connection to today’s world.”
Another argument is that it’s all about competing on the wrist, not in the shop windows. It’s possible that if consumers take to wearing a smartwatch, they won’t look back. Rapidly iterating tech giants can ensure the product grows with the customer, bringing out upgrades often enough to maintain interest.
The common rejoinder from the Swiss is to see smartwatches as a gateway drug for “proper” watches. That fits with the proposition of a luxury timepiece as a purchase that lasts a lifetime – something you buy when you’ve left behind the fashions and fads of your youth. Bremont’s Ayton believes it: “Anything that puts something on the wrist of young people, especially men, is a good thing.” He even holds that the intrusiveness of Apple Watch’s alerts will cause some customers to push back.
The stats show that smartwatch ownership is highest in the 25-34 age group. With the exception of the Pebble, decent smartwatches aren’t cheap, so they’re being bought by people who, by the Swiss logic, should be switching to proper watches. And it seems a little too confident to rely on some innate desire for a timepiece on the wrist. You may well be a watch fan – but how many of your friends rely solely on their phones for timekeeping? Of course, there are those who will argue that the debate is healthy for all involved – at least we’re thinking about what’s on our wrists.
Facing the future
TAG Heuer CEO Jean-Claude Biver is betting big on a smartwatch – the Carrera Wearable 01 – bringing new customers to his brand. But he also predicts a fundamental diversification in this brave new world. “On one side we’ll have the ‘eternal’: watches that will be working and repairable in 1000 years,” he says. “And on the other hand the ‘obsolete’, which are all the technology watches born from an industrial process and condemned to become out of date. Those trends won’t compete against each other, but are complementary.”
Mr Biver has a track record of calling it right. But it’s worth remembering that, as things stand, the smartwatch market is having to work very hard to justify its existence. Apple sold only 3.6 million watches in Q2 of 2015, although it does already represent 20 per cent of the market. And once the early adopters have all bought one, the smartwatch faces a harder struggle to make an impact on middle-ground consumers. A desire not to get burned again means Switzerland’s firms are having to board the bandwagon with little idea of where it’s headed.
Whether the Swiss innovators will make an impact also remains to be seen. If Biver’s assessment is correct, they will have to learn to put products out at the pace of Apple et al. But with some big names still playing it down on their smart ambitions, one thing is for sure: the cyberwar is about to get serious.
SMARTWATCHES FOR DUMMIES
A user-manual-free guide to the new slew of next-gen timepieces
MONTBLANC E-STRAP
A USB-stick-size steel nugget attaches to the strap, where it tracks activity, displays notifications and controls your music.
BREITLING B55 CONNECTED
Relying on a phone app, its functions – flight timing, tachometer and take-off
countdown – are aimed squarely at pilots.
BULGARI DIAGONOMAGN@SIUM
Still a concept, developed with info-security specialists WiseKey, it unlocks your digital vault when in contact with your phone.
IWC CONNECT
Still under wraps, a module sewn into the strap “enables control over devices connected to the Internet of Things”.
TAG HEUER CARRERAWEARABLE 01
“The world’s first luxury AndroidWear smartwatch” will have a 40-hour battery – but not the coveted “Swiss-made” tag.
APPLE WATCH $599
Third-party programs can now access the heart-rate monitor, run on the watch without your phone and contribute to day’s activity total.
SAMSUNG GEAR S2 CLASSIC $598.99
As well as swiping the screen, you can also rotate the bezel to quickly navigate through the widgets and installed apps.
SONY SMARTWATCH3
Compatible with Android devices, the built-in GPS allows you to accurately measure your physical activity without lugging around a phone.
