New York Times writerflags the Audemars Piguet Royal Oak Offshore, A. Lange & Söhne Lange 1, Vianney Halter Antiqua, F.P. Journe Chronomètre à Résonance, Richard Mille RM 001, Ulysse Nardin Freak, Urwerk UR-103, MB&F HM4, Bulgari Octo Finissimo Tourbillon and the Apple Watch. As they say on Sesame Street . . .
One of these things is not like the other. The question facing the traditional watch industry – at the lower to middle of the market – will the Apple Watch lead watch-wearing newbies into the world of traditional horology?
In 2019, the Apple Watch outsold the entire output of the Swiss watch industry. There’s no reason to believe the Apple Watch’s market share will diminish when the world economy staggers back to life. So the future of the entire mainstream traditional watch industry depends on a simple calculus: Apple Watch -> traditional watch.
For mechanical watchmakers, the Apple Watch’s most significant legacy may be its role as a gateway to traditional watch consumerism.
“Back in 2015, 44 percent of U.S. adults wore a watch,” said Reginald Brack, watches and luxury industry analyst at the market research company NPD Group. “Flash-forward to 2019 and 55 percent of U.S. adults wear a watch.”
The statistic may actually be bad news. It doesn’t tell us what percentage of new watch wearers are wearing a traditional watch, and what percentage are wearing smart watches.
Or how many traditional watch wearers traded their traditional watch for an Apple Watch, and whether the switch killed their interest in traditional watches. And, crucially, are Apple Watch initiates tomorrow’s traditional watch buyers?
Back in September, Ulysse Nardin CEO Patrick Pruniaux shared his quasi-religious faith in this Apple -> traditional watch transition.
The smartwatch is bringing in millions of customers who were not wearing a watch. One day, they will discover a smartwatch is good but most of their functionality is already on the phone. Smartwatches are an opportunity. We compete for the piece of real estate that’s your wrist, but that’s it.
Let’s set aside Mr. Pruniaux’s apparent obliviousness of the Apple Watch’s intrinsic appeal and focus on his message: we’ve losing the battle, but we won’t lose the war! Absent hard numbers, common sense tells us it ain’t necessarily so.
If you think of a traditional watch as a snifter of bourbon, the Apple Watch is crack cocaine. Once you’ve acclimatized to its ever-expanding capabilities, ditching the AW for a simple time-teller is like throwing away the TV remote. Literally.
There’s only one thing an Apple Watch can’t do that a traditional watch can: stunt and floss. Some percentage of the watch-wearing population will still want a traditional watch for style points.
Style-driven designer-branded watches helped the Swiss watch industry back in the 80’s and 90’s (after SWATCH paved the way). Fossil, one of the biggest beneficiaries, has tanked. This despite jumping into the smart watch business with both feet.
But the watch world has undergone a profound shift. It’s no longer designer brands competing with each other. They’re all competing against an endless wave of tech-savvy horological disrupters: Apple, Garmin, FitBit and the like. Software makes their smart watch competitors a constantly moving target. Traditional watchmakers don’t have the skills or culture to compete.
Traditional watches aren’t competing for wrists as much as they’re competing for time. The Apple Watch and its ilk are far too useful, too addictive, to leave on the charger. Once worn, they become indispensable for daily use. All that’s left is “social” wear: predominantly nights and weekends.
That’s not a data-driven assertion, but I’d bet dollars to donuts that an increasing number of Ulysse Nardin’s well-heeled buyers are Freaking out at night.
How many watches do buyers need for occasional social use?
Immersed in the watchblogosphere, it’s easy to forget that most watch buyers don’t treat timepieces like women treat shoes. That’s doubly true for Apple Watch wearers, who regularly upgrade to the latest model. Or not.
Traditional watchmakers are fighting for business in a decreasing market for their product, wooing consumers who may well be buying a smaller number of watches.
The upside: traditional watch buyers are set to benefit from a combination of burgeoning supply and diminishing demand. And high horology will always remain a thing. The downside: the traditional watch industry is heading for a major contraction. The golden age of the traditional wristwatch is coming to an end.