The Apple Watch, launched less than five years ago by its namesake colossus of a company, now outsells the entire Swiss watch industry, which has been manufacturing wristwatches for 152 years. Last year, Apple Watch sales increased by 36 percent to almost 31 million watches while the Swiss watch industry in toto shipped some 21 million units, an unlucky 13 percent decline. These figures are according to the research firm Strategy Analytics.
The one solace for Swiss watchmakers is that they still generate more revenue: $21bn to Apple’s $11bn. But on current trends Apple will overtake the Swiss on that measure, too, by 2023.
MacDailyNews Take: Of course, the average selling price for a Swiss watch far exceeds Apple Watch’s ASP. It’s amazing that Apple Watch units will increase so strongly as to be able to overcome the pricing discrepancy with Swiss watches to enable Apple to take the overall wristwatch revenue crown as well.
Of course, it would be a mistake to think of the Apple Watch as just a watch. The success of smartwatches follows the increasingly clichéd storyline of software eating hardware, as we have seen with cameras, calculators and DVDs. Not only does a smartwatch tell the time, it operates as a wearable computer…
Several lessons can be drawn from the rise of the smartwatch. First, it is hard now for any traditional industry to predict where their deadliest rivals will emerge, given the mutability of competition… Second, a smart product is always likely to outsell a dumb one… Third, a big generational shift is under way as younger consumers increasingly live their lives online.
MacDailyNews Take: Of course, some astute, beer-swilling souls can predict what will happen to traditional industries rather presciently:
We do not foresee anyone wanting to take off their Apple Watch in order to wear a “jewelry watch.” Apple Watch is not just a watch to be replaced with another regular watch… 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
That said, even though by units Apple Watch outsells the entire 152-year-old Swiss industry, sales of high-end Swiss watches over $5,000 and up have seen growth. There will always be a niche market for fine wristwatches, even as the industry itself seems bound for consolidation.
MacDailyNews Note: Today is Washington’s Birthday in the U.S.A., a federal holiday and, as such, the U.S. markets are closed for the day. We will resume our normal posting schedule tomorrow.