Spotlight: Should Swiss watchmakers be nervous before AppleWatch? Probably not

The unveiling on Monday of the long-awaited Apple Watch has caused Switzerland's famed watch industry to have mixed feelings, concerns and responses.

While some said the competition might put a lot of pressure on traditional watchmakers in Switzerland and signal an impending so-called ice age for the classic wristwatch, others were less worried, arguing that the Apple watch, which should reach the market next month, is essentially a "shrunken smartphone" or an "electronic watch" and would provide little in the way of rivalry.

"Smartwatches represent a challenge to the Swiss watch industry that is comparable to the appearance of quartz technology, we cannot ignore this tsunami that is coming closer," Guy Semon, general manager of French luxury goods group LVMH, whose portfolio includes the famous Swiss watchmaker TAG Heuer, told media.

Swatch co-inventor Elmar Mock also showed his deep concern for the Swiss watch industry.

Mock predicted the Apple watch may reach sales of 20 million to 30 million units annually in the first few years and soon become the largest watch producer in the world, putting the jobs of many Swiss watch workers in danger.

In a bid to compete with the Apple watch, Swiss watchmakers such as Tag Heuer, Swatch and several others have already started their own smartwatch plan.

However, there seem to be more optimistic voices.

"I don't see it as a threat to us," a senior sales employee from Patek Philippein told Xinhua, "you spend 10,000 U.S. dollars on a Swiss watch knowing it will keep its value even 100 years later, but the Apple watch? Maybe after one or two years you will want to replace it."

In a recent interview with media, Thierry Stern, chairman of Patek Philippe, also said he didn't see smartwatches posing much of a danger to his company.

As the company's newest device in years, Apple Watch works mostly with iPhone and its price will range from 349 U.S. dollars for the basic model to 17,000 U.S. dollars for the high-end product, while the price for a Pateck Philippe watch usually starts from 10,000 U.S. dollars each and can be as high as 1 million U.S. dollars.

"Generally speaking, no one buys a Swiss watch just for the time; Luxury is its own commodity," a watch shop owner in Geneva said, adding that he thought the Apple Watch would certainly cause some stir, but the smartwatch series as a whole would not bring a huge competition.

"People are still fond of our Rolex, Patek and Cartier watches. The traditional, timeless pieces that can be passed from one generation to the next remain coveted and collected," said the shop owner who declined to give his name.

According to a recent Credit Suisse report, Switzerland enjoys a near-monopoly position in the luxury segment of the watch industry, about 95 percent of the country's watch production is for export, among which some 28 percent enters into the Chinese mainland and Hong Kong.

"In contrast to other luxury goods such as automobiles or artwork, a watch can be worn and displayed at all times. Moreover, a watch is the only universally accepted piece of jewelry for men," the report analyzed, hinting that the newly emerged smartwatches will have little impact on the country's watch industry.

For many producers and consumers of Swiss watches, the so-called smart watches are items people replace every couple of years and it is hard to imagine an "Apple gadget as a family heirloom," they said.

For Jean-Claude Biver, head of the watchmaking division of LVMH, and a legendary figure among Swiss watchmakers, the Apple watch "looks a little cold, and lacks, for my taste, a bit of personality."

"It looks perfect, but perfection sometimes has a lack of sexiness," he added.

His comments may well mirrored by Stephane Linder, incoming CEO of Gucci Timepieces, who once said people love luxury watches because "you can feel the hand of people in it."

Some people compared the coming of Apple Watch to the introduction of the quartz movement by the Japanese in the 1970s. This shift had such a great impact in the Swiss watch industry that from the 1,600 Swiss watchmakers in 1970, there were only 600 still in business in 1983, putting 60,000 people in Switzerland out of work.

However, Japan is hardly making any watches today and Switzerland is still the number one watch exporter in the world.

In brute volume terms, Switzerland manufactures 2.5 percent of the world's watches, but these watches make up over half of the world's sales value figure, and watchmaking as a sector is once again a vital part of the Swiss economy, accounting for 10.7 percent of its total annual exports of goods.

According to the Federation of the Swiss Watch Industry, the growth rate of Switzerland's watch report has accelerated. While the annual growth for the 1990 to 2000 period was 4.3 percent, the figure jumped to 7.2 percent in the past decade.

When asked for his opinion on the Apple watch by a New Yorker writer, Sebastian Vivas, the director of Audemars Piguet's watch museum in Switzerland, said: "We're not afraid, we're just a little bit smiling."

Some people even see it as a good news for the Swiss watch sector, because they believe that the Apple watch might train consumers especially young generation to once again look for the time on their wrists but not on their phones.

"That cultural shift could result in a new fan base for handmade watches, the timing would be ripe for such a wristwatch renaissance." a local analyst said. Endit