To convince the most skeptics, I don’t adhere to the watch industry’s defense line which consists – with very few exceptions – to deny the existence of a market connected with watches or smart watches.

I also recommend avoiding confusion between the quartz crisis of the 1970s and the launch of smart watches. The introduction of quartz is a technological breakthrough, smartwatches are just an evolution – miniaturization – existing technology.

On the other hand, the common point between the two is the inability of industry players to understand that newcomers can disturb existing order. Other industries are no more visionary than Swiss watchmakers, starting with the automotive industry, which doesn’t see Tesla coming in and its electrical technology. Or Sony who doesn’t understand that the Walkman has to move into the digital age what Apple has done with the success we know.

The equation between Tesla and Apple? A business model that goes beyond the product and includes products, distribution, and related products. The customer becomes a prisoner, because once he has followed the mode of brand operation that he can or will really want to leave the world of brands.

Similarities between Swiss car manufacturers and watchmakers? They do not understand that the new generation of consumers, Millennials, adhere to brand rhetoric if they consider it credible. And they are future customers for luxury car and watch manufacturers. Even for a $ 300 watch (the new Apple Watch 3 sells for $ 329) it is a luxury item for this customer segment.

The question is no longer is there a market for connected watches: the clock sold more than 34 million in 2018 and the market leader – Apple – has a 33% market share. This figure should be compared to more than 25 million watches sold by the entire Swiss watch industry in 2018!

The question is why no Swiss watch brand at the entry level, that is, within the price range of Apple Watch, has started a counterattack! I repeat: there is no technology used in smart watches that is unknown to Swiss watchmakers and none of them bother. Swatch Group provides examples, mastery (R & D and manufacturing) of all the technologies needed to design a connected watch. In addition, Swatch Group supplies eg. Garmin or Suunto with all the technology needed to operate their watches (touch sensitive windows, accelerometers, etc.).

A rare exception to this situation is represented by the Breitling initiative, TAG Heuer, Frédéric Constant or Montblanc, but it is still in the price range which is largely inaccessible to potential customers. This potential customer does not buy a watch, but a connected object which – by chance – shows time.

It remains to be understood why there are no Swiss watchmakers – at least at the beginner level – who try to fight Apple America and Motorola or Samsung Korea, even when we master technology and we are still many market leaders (only in value!)?

The answer is relatively simple and fits the paradigm of a leader who feels indisputable in the area of ​​excellence. While Mr. Nicolas Hayek in an interview published in 1993 (Harvard Business Review, Bill Taylor) explained that it was never necessary to give reasons to the enemy (at that time Japanese people) we feel today the neglect (almost) of this total market segment by watchmakers Switzerland. If some are still skeptical about the impact of watches connected to the sales figures of entry-level watch brands, I invite them to consult with Swiss watch federation statistics. There is a 28% reduction in sales volume and a 10% reduction in value for exported watches with an export price of less than CHF 200.

The connected watch is not the future of Swiss watches … but it could be this is the beginning of the end!

If Swiss watchmakers do not make an effort to take the initiative, we will see a further decline in sales volume which will be synonymous with deindustrialization. Some rare volume brands will most likely survive, such as Omega, Rolex with its Rolex Oyster Perpetual, Cartier or Longines, because they represent – in their market segments – mandatory objects are more than watches. Just as some niches or craft brands certainly have a future.

On the other hand, I doubt very much about the future of the entry-level Swiss watch market that finally has to wake up to understand that smart watches are connected objects to manage content and data that is currently at stake by commercial wars around to be won by several actors.