Then: Seiko Changed the Landscape
If you know the luxury watch industry, you know that the name “Seiko” tends to make watch snobs shudder. The company is not based in Switzerland and doesn’t focus heavily on high-precision, mechanical movements. Seiko also pioneered the mass switch to battery operated quartz movements that crippled the Swiss watchmaking industry in the 70s. This later came to be known as the “quartz crisis”. Before quartz watches were introduced to the consumer watch market, Switzerland had a monopoly on the industry. They controlled at least a 50% market share of all watchmaking worldwide.
With new technologies on the rise, companies began racing to produce the first electronic movement small enough to fit on a wrist. Swiss companies joined the race, but their dominance in the industry coupled with their national pride in mechanical watchmaking gave them no sense of urgency to start mass producing quartz watches. Unfortunately, their hesitance to jump onboard with the quartz watch revolution yielded devastating economic consequences.
In 1969, Seiko released the world’s first battery operated quartz watch called the “Astron”. Following its release, the market quickly responded by demanding a massive volume of quartz watches. Swiss watchmakers suffered dearly, while Asian and American companies prospered. From 1969 to 1988, Swiss watchmaking employment fell from 90,000 to 28,000. The landscape had completely changed. Swiss brands could not compete with the accuracy and affordability of quartz watches. Rather than accommodate the market’s demand, the Swiss watch industry downsized and transitioned into a business of luxury.
Now: A “Smartwatch Crisis” On Our Hands?
Fast forward to 2016 – we are now immersed in an age of remote connectivity: social media, cloud computing, and mobile technology. This has brought about the recent integration of smartwatches into the global market. The versatility of a smartwatch far exceeds anything that a mechanical watch could ever hope for. You’ll never be able to check the weather, schedule an appointment, or pay your bills using an automatic watch. And yet, mechanical watch lovers are (for the most part) unimpressed and the Swiss luxury watch market is doing just fine.
The extent to which smartwatches will affect mechanical watchmaking is still unclear. Breitling, TAG Heuer, MontBlanc, Tissot, and Movado have all made pre-emptive efforts to establish a presence in the smartwatch industry. Contrarily, the more prestigious brands such as Omega, Rolex, and Patek Philippe have stuck to their guns by continuing their exclusive pursuit of mechanical perfection. On one end, it is argued that mechanical watches are classic and will never become obsolete. On the opposite end, it is argued that these Swiss companies need to jump off of their high horse and get with the times.
In reality, there may still be room for everyone. Although the Swiss took a huge blow to their industry in the quartz crisis, they survived by making a successful transition into the luxury market. Much like the quartz versus mechanical discussion (accuracy versus prestige), the appeal of a smartwatch is easily different from the appeal of a purely mechanical luxury watch. The technologically inclined and the trendy will be drawn towards products like the Apple Watch, but the affluent will likely stick with the high status exuded in wearing a Yachtmaster or a Nautilus.
Out of all parties involved, the Swiss luxury brands currently looking to stake their claim in the smartwatch industry have the steepest hill to climb. Technology-centric companies, for the most part, already have a loyal clientele in place to market smartwatches to. Apple’s customers are notorious for being blindly loyal, so much so that they have been called “iSheep”. Android demands over half of the global smartphone market every year. Google generates the highest internet traffic in the world. If Amazon chooses to join the fray, it is convenient that they are already the largest e-retailer in the United States. Ultimately, it’s going to be hard for Swiss brands to market $2000+ smartwatches against trusted companies that sell the same (or better) product for a small fraction of the price. To all companies competing: may the best man (corporation) win.
Interested in buying a quartz, mechanical or smartwatch? We have them all! Check out our Current Specials.
- David Landes, Revolution in Time: Clocks and the Making of the Modern World, Cambridge, Massachusetts, 1983.
- Thompson, Joe. “1969: Seiko’s Breakout Year.” WatchTime USAs No1 Watch Magazine. Watch Time, 20 Dec. 2009. Web. 01 July 2016.
- The Market for Watches and Clocks (New York, 1992), 1, 86.
- Kelly, Gordon. “The Majority of IPhone Users Admit to ‘Blind Loyalty’ – Why This Is A Problem For Apple.” Forbes. Forbes Magazine, 14 Mar. 2014. Web. 01 July 2016.