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 Shipments of smartwatches overtook traditional watches in the final
quarter of 2015, according to Futuresource Consulting.
While their rapid rise has so far had little impact on Swiss
watchmakers, because of the latter's focus on higher prices, the
industry started to look seriously into the potential for luxury
smartwatches after the success of the Apple Watch last year.
Now the race is on to grab a chunk of a smartwatch market expected
to grow from $1.3 billion in 2014 to $117 billion in 2020, according
to researchers Smartwatch Group.
"Next year, we'll have a real collection, a new version with six to
eight models," LVMH's head of watches and jewelry Jean-Claude Biver
told Reuters at an industry fair this week, referring to
smartwatches at its Swiss brand TAG Heuer.
TAG Heuer partnered with U.S. technology firms Google and Intel last
year for its TAG Heuer Connected watch, and said the first 15,000
units offered at just under 1,400 Swiss francs ($1,446) apiece sold
out quickly.
"We totally underestimated demand, we were too cautious," Biver said
at the Baselworld watch and jewelry fair, adding the brand had
invested about 10 million Swiss francs in the project so far.
He said he was expecting to sell a further 40,000 to 50,000 pieces
this year. From September, they would be assembled in Switzerland on
a line set up by Intel.
"Nobody knows what will happen with smartwatches. Of course, we
could just watch this train from afar to see where it goes, but I
prefer to be on board," Biver said, adding connected watches could
ultimately represent a third or even half of TAG Heuer's sales.
Also at Baselworld, Swatch Group's <UHR.S> Tissot, one of the more
affordable brands of the world's biggest watchmaker, presented its
first connected model, the Tissot Smart-Touch, that lets users
connect to their smartphone as well as to other external services,
such as weather stations.
"Swatch Group is the only Swiss watchmaker able to do a smartwatch
on its own," Tissot Chief Executive Francois Thiebaud told Reuters.
Swatch Group launched a connected watch under its Swatch brand about
ten years ago.
Thiebaud said the Smart-Touch's advantages over existing
smartwatches were its much longer battery life of up to one year,
rechargeable via a solar panel, and the fact the watch continued to
function as a "normal" watch once the connected technology was
outdated.
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"Other smartwatches are miniature smartphones on the wrist, while
our product's first purpose is to indicate the time," Thiebaud said.
He said the brand was aiming to sell 20,000 to 40,000 Smart-Touch
watches in the first year.
The Smart-Touch, whose battery is made by Swatch's Renata unit, will
be available from late autumn or early winter and cost around 1,000
francs.
While most Swiss watchmakers lack the technological skills and
distribution network to make and sell smartwatches, tech giants
clearly value their know-how in watch design.
Jeweler De Grisogono, for example, teamed up with South Korea's
Samsung Electronics last year, and presented a diamond-studded
version of Samsung's Gear S2 smartwatch at Baselworld, aimed at
attracting more women to the category.
"This is something very new in the smartwatch category. It's a real
luxury watch," Fawaz Gruosi, founder of De Grisogono, said of the
limited edition watch that will sell for 14,900 francs.
According to Futuresource, women account for 60 percent of all watch
sales, but only 34 percent of smartwatches.
($1 = 0.9685 Swiss francs)
(Reporting by Silke Koltrowitz; Editing by Mark Potter)
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