“The Swatch watch is unwinding,” Andrea Felsted and Alex Webb report for Bloomberg. “The Swiss manufacturer of its namesake brand and higher-end timepieces such as Harry Winston is facing twin pressures.”
“The company on Thursday reported worse-than-expected 2018 sales and profits. It was hurt by a slowdown in China in the final three months of the year,” Felsted and Webb report. “While some luxury players, including LVMH, have said that China is holding up, or even improving, that doesn’t seem to be the case in watches. Swiss exports to China fell 10 percent in December, a worrying sign for the industry. Swatch is particularly vulnerable – some 35 percent of revenue was generated from Greater China in 2017, according to Bloomberg data.”
“But there is another threat,” Felsted and Webb report. “In 2018, the annual volume of the devices sold by Apple Inc. might have matched or even exceeded that of the entire Swiss watch industry. The competition has already eaten into the nation’s exports of lower-priced timepieces.”
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“The situation is about to get worse,” Felsted and Webb report. “Revenue from [Apple’s] Wearables, Home and Accessories vertical, which also includes the HomePod smartspeaker and AirPod earphones, jumped 33 percent in the three months through December… Three years ago, Swiss manufacturers mocked the Apple watch. Now, they are no longer laughing.”
Read more in the full article here.
MacDailyNews Take: YKBAWID.
Here’s what makers of Swiss or any other watches should do: Push the idea of wearing of two watches, one on each wrist or two on one wrist, into vogue. Because once people start using Apple Watch, they aren’t going to want to leave it at home. Ever. They won’t want to go to dinner parties without their Apple Watch. And that’s bad, bad news for watchmakers not named Apple. Watch and see. – MacDailyNews Take, April 16, 2015
SEE ALSO:
Apple Watch sales momentum is growing; unit sales now rival those of Macintosh – January 23, 2018
Study shows active Apple Watch users gain extra years of life – November 28, 2018
Apple’s line of smartwatches outsold the entire Swiss watch industry last quarter – February 12, 2018
Apple Watch has blood on its hands: Adidas’ fitness wearables are dead – December 19, 2017
Apple Watch: The war for wearables is over, and Apple won – December 12, 2017
Strategy Analytics: Apple becomes world’s no.1 wearables vendor in Q1 2017 – May 5, 2017
Apple Watch had massive holiday quarter; took nearly 80% share of total smartwatch revenue – February 10, 2017
Apple Watch dominates with 63% of worldwide smartwatch market – February 2, 2017
Apple Watch has blood on its hands: Pebble is dead – December 7, 2016
Apple Watch has blood on its hands: ‘Microsoft Band’ wearable is dead – October 4, 2016
IDC: Apple remains far and away the market leader in smartwatches – July 21, 2016
Juniper Research: Apple is world’s #1 smartwatch maker – July 23, 2015
“We’ve learned and struggled for a few years here at Swatch figuring out how to make a decent watch … PC guys are not going to just figure this out, they’re not going to just walk in.”
BOOM!
The wearables category for Apple brought in 7.5B last quarter. Hard to compare with earlier quarters since this is a new category that replaced others.
Still it is likely that the watch (and AirPods) are significant revenue generators in that segment.
I would argue that both of these items represent another new growth area for Apple. Like other Apple successes they have addressed major failing in competiting products and convinced customers to spend the extra money to buy them instead of cheaper or less functional options.
The market seems to think that Apple product have to be sell in volume from day 1 to be considered successful.
The iPod did not right away and I bought in at the 3G stage. The iPhone was cool but again did not pick up until the third party apps came on board. This happened at the 3GS release which again was when I bought into the iPhone. iPads did reasonably well from the start but the iOS environment was already established.
Whilst I did buy the 1st gen AppleWatch because it fitted a need, major gains happen at later releases and coincidenced with better performance and battery life.
AirPods was another first gen buy for me, also because it fitted a need I had. But only now am I seeing many people wearing them despite the obvious demand from the get go.
Maybe then we should be looking at where Apple products are making gain rather than fixating solely on the iPhone. In the end, those new products will help Apple grow more.