Swiss watchmakers have dominated the market for luxury watches for ages, but this leading position is being threatened by the rise of smartwatches. While some analysts and the Swiss companies themselves have said that these cheaper smart wrist-worn devices wouldn’t present any threat to the secular industry, sales numbers and financial results unveiled last year showed a different scenario. Mainly thanks to Apple and other wearable makers, in Q4 2015, smartwatches have surpassed Swiss watch sales for the first time, closing in 8.1 million units sold, against 7.9 watches from Switzerland, with the latter down from 8.3 million when compared to Q4 2014. Last year, TAG Heuer, one of the most traditional Swiss company, said “no” for staying behind and released their own Android Wear smartwatch, despite criticism from other watchmakers from the country. Some analysts thought the TAG Heuer Connected would be a flop, but it actually sold very well, despite its high price tag of $1,500. TAG Heuer’s CEO, Jean-Claude Biver has declared that more of their brands may be joining the club by releasing smartwatches.
According to a report from Bloomberg, Hublot may add smart functions for their watches in 2017 or 2018, and Zenith could also to the same in the future. It is important to note that it is not clear if the company will be using Android Wear on the watch. Smart functions can vary from heart rate monitors to smartphone connectivity to show notifications and calendars, and so on, so they have several options out there. Samsung, for example, jumped off the boat from Android Wear and their smartwatches are now powered by Tizen, which could be an alternative for other smartwatch makers.
The announcement by Mr. Biver, who is the CEO of TAG Heuer and Hublot, which are both owned by French luxury goods conglomerate LVMH, was made during Baselworld 2016, the largest Swiss watch industry annual event. TAG’s ventures with smartwatches haven’t gone unnoticed by other Swiss watchmakers and during the event, Thierry Stern, Patek Philippe’s chairman, criticized the company saying that they are choosing to sacrifice quality in order to compete with Apple, but Mr. Biver disagrees. It is still too early to evaluate the impact of such moves for the industry as a whole, but TAG seems to have bet well, and, in time, we should have more information about Hublot’s venture on smartwatches.