Is time running out for the Swiss watch industry?
Here's a fact that people in the watch industry don't enjoy hearing: Apple is the biggest watchmaker in the world. Tim Cook, the technology company's CEO, announced that it had taken the top spot from Rolex just last month. What makes this fact more impressive, is that Apple has been producing watches for just three years. Rolex has been churning them out since 1905.
Watchmaking truly is an art, but one that's no longer cherished as it once was. The devices around us constantly remind us of the time. Phones light up, calendars beep and buzz to keep everyone on track. Media is pushed straight to our smartphone; the morning and evening papers are gone, replaced instead by a torrent of Tweets.
But technological disruption on the wrist is just one factor contributing to the watch industry's general dismay. The Richmont Group – parent company of such high-vaulted brands as Vacheron Constantin, Cartier, Jaeger-LeCoultre, Panerai and Montblanc – just announced a massive corporate re-structuring. This is on the back of reports that exports in Swiss watches have fallen for the third year in a row. Something that hasn't happened since 1930, in the depths of the great depression.
So what's actually happening? Have smartphones replaced the need to know the time? Are new-fangled smartwatches making traditional watches look like antiques – and thus prompting the masses into buying digital versions, instead? Or have we, as a population, simply moved on from carrying the time around on our wrists?
To understand what's going on within the watch industry, you must go inside it. On the one hand, there is a blind nonchalance. Saying that an Apple watch is similar to a high-end complication, would be like comparing a Toyota to a Bugatti. Yes, the industry will say, they both tell the time. But one is art, and the other gets you from A-to-B. As such, it's not a fair comparison to make.
This is echoed in the statements made by watch CEOs around the world. Raynald Aeschlimann, the CEO of Omega, has refused to call Apple's wrist wear a watch at all, referring to it as "an electronic accessory." The CEO of Audemars Piguet, François-Henry Bennahmias, isn't much kinder, previously describing smartwatches as "completely mass-market products, like fast food".
But there is also an unwillingness to embrace the new. While some high-end brands will have at least – begrudgingly – realized that smartwatches have become too big to ignore (producing bottom-of-the-line digital versions of their most consumer-friendly lines), an air of snobbery remains. And it's incapacitating the watch industry towards change.
What many fail to understand is that watches have become a commodity. Companies like Daniel Wellington and MVMT are selling millions of watches each year. Fashion brands have entered the fray; sticking logos on poorly-constructed watches and virtually gutting the bottom-end of the watchmaking industry. And then there is the eponymous Apple. Slowly but surely investing in high-end materials (the all-ceramic version of its latest Apple Watch is being compared to Rado's flagship line) and talent, such as Angele Ahrendts (who was previously in charge of luxury atelier Burberry).
As the watch industry continues to bury its head in the sand, blaming falling numbers on wider economic insecurities such as the cost of oil, dollar prices and dwindling Chinese tourist numbers, there are a few voices speaking out. And one, in particular, tends to drown out all others.
Jean-Claude Biver is something of a legend in the watch industry. After successful careers at Omega, Blancpain and Hublot, Jean-Claude Biver currently runs the watch division at LVMH. That means he oversees luxury watch brands such as TAG Heuer and Zenith but is also plugged in to the luxury behemoth's wider strategy. He's behind Louis Vuitton's recent push into fine watchmaking, for example, as well as TAG Heuer's entrance into the world of smartwatches (after a partnership with Google, no less). More importantly, he is very open-minded to new ideas and generally has a good gauge of what customers want. He's also not one to let his opinions go unspoken.
In 2014, when Apple officially announced it was getting into the watch a game, Biver dismissed it like everyone else. "This watch has no sex appeal. It's too feminine and looks too much like the smartwatches already on the market," Biver said in an interview with daily Die Welt. "To be totally honest, it looks like it was designed by a student in their first trimester," added Biver. He also predicted that smartwatches would soon be outdated, citing the fact that luxury watches must be rare and convey prestige. But just two years later, Biver would be shilling the benefits of smartwatches and leading Switzerland's most aggressive answer to the Apple Watch: the TAG Heuer Connected.
According to Biver, TAG's first Connected watch – which retails at US$1,500 - sold more than 55,000 units. Its second version, the TAG Heuer Connected Modular 45 (which lets owners switch between connected and mechanical modules) is expected to sell upwards of 150,000. Interestingly, Biver sees the device not as a commercial success, but a way to drive interest in the entire brand. "Since the end of 2015, our sales have grown again, most recently by around 15 percent. The smartwatch and the publicity that it brought us have played a role in that."
Jean-Claud Biver is firmly in the, 'if you can't beat them, join them' camp. But while that works for brands such as TAG Heuer – which targets the mid-to-low end of the watchmaking spectrum, what's a big brand to do; produce an even more expensive smartwatch? Potentially. Hublot may add intelligent functions to watches in 2017 or 2018, and Zenith would also consider doing so sometime, Jean-Claude Biver said in an interview at this year's Baselworld watch fair. Some of the functions could be sports-related, similar to its sister brand TAG Heuer, he added.
But what of the more glitzy houses, like Urwerk and MB&F, along with the more traditional watchmakers, such as F.P. Journe and Bovet – companies that make beautiful watches for the sake of it, and for collectors who pay over-the-odds for a piece of art – not convenience – on their wrist. Chances are, they'll make it out of the turmoil, but in the same way that vinyl producers have found a small niche with music lovers.
So far, the watch industry has ignored its true market: watch obsessives who visit sites like YouTube to salivate over watches, and post wrist-shots on Instagram. It's why Apple is currently selling more watches than anyone else; because people no longer need watches, but Apple understands why they want them. And it's why events – such as Dubai Watch Week – are so important.
There are few times that watchmakers, watch collectors and the general public ever get to rub shoulders together in the same space. It happens but days of the year, generally at the tail-end of industry gatherings such as Baselworld. But perhaps what used to be a time for brands to showcase the year's new wares, should start to take on new meaning. Non-commercial events such as Dubai Watch Week are really a chance for the watch industry not to shout about new watches, but instead to listen. Because it they won't, Apple sure will.
You can see the latest collections from all the brands mentioned above – as well hear the keynote speech about the watch industry from Mr Jean-Claude Biver at Dubai Watch Week. Under the Patronage of Shaikha Latifa bint Mohammed bin Rashid Al Maktoum, Vice Chairman of Dubai Culture & Arts Authority, Dubai Watch Week returns for a third consecutive year in November 2017. Organized by Ahmed Seddiqi & Sons in partnership with the Fondation de la Haute Horlogerie (FHH), the five day cultural and educational event (16-20 November) will once again host key industry spokespeople and the leading names in the world of horology.