Old-school watchmakers push smart features to counter Apple Watch

Global shipments of Swiss watches steadily slipped after the first Apple Watch was unveiled in 2015.

Business Standard : Watchmakers, caught off guard by the success of Apple Inc.’s smartwatch, are now trying to keep pace with changing customer tastes by introducing messaging alerts and other high-tech features to traditional watches.

Brands including TAG Heuer, Swatch and Fossil Group are working with Apple rivals such as Alphabet Inc.’s Google and Intel Corp. to offer their own smartwatches or hybrid versions that offer smart functions while retaining traditional design.

Global shipments of Swiss watches steadily slipped after the first Apple Watch was unveiled in 2015, a dip compounded by a slump in China sales. Despite picking up in the past two years, they were overtaken last holiday season by Apple’s smartwatch for the first time. UBS predicts Apple Watch sales will rise 40% next year to reach 33 million. The tech giant is expected to move 8.8 million shipments in the fourth quarter of this year, said Francisco Jeronimo, a research director at International Data Corporation.

“The global watch market has had a shock and it worries us,” Daeboong Kim, head of South Korea’s Watch & Clock Industry Cooperative, said in an interview at the world’s biggest industry fair in Hong Kong in September. The cooperative is getting advice from Samsung Electronics Co. , the world’s biggest smartphone maker, to help members develop watches with smart functions. Samsung and Apple declined to comment.

Sales of smartwatches overtook mechanical watches in 2016 while hybrid-watch sales rose to 7.5 million world-wide in 2017 from almost nothing in 2015 according to market-research firm Euromonitor International. Sales volumes for both watch types are set to double by 2020, it predicts.

The digital divide is growing, however, as the Apple Watch Series 4 released last month added an alert system for when the wearer falls down and a function designed to identify heart irregularities. Analysts say those features target a demographic of faithful watch buyers who are typically more resistant to technology: older customers.

While some traditional watchmakers have tried to move into smartwatches, many have focused on hybrids. Typically, these don’t have touch-screens. Instead, they are synced with smartphones via an app and alert the wearer to messages or calls through vibrations, blinking lights or by moving the watch’s hands. Via Bluetooth connection, users push buttons on the watch to control the phone’s camera and music functions.

TAG Heuer is one of the higher-end brands fighting back, releasing an upgrade of its smartwatch, the Connected Modular 41, earlier this year. The watch is the result of collaboration with Intel and Google. It has fitness tracking, GPS, and contactless payment.

Jean-Claude Biver, TAG Heuer’s chief executive, said its hybrid is having success because “it really looks and feels like a real watch, but with all the information you need.” TAG Heuer is owned by LVMH Moët Hennessy Louis Vuitton SE, which declined to disclose sales figures... Read More