LVMH, Omega among luxury brands playing catch-up with Apple in smartwatch race
If any doubt remains about the huge potential of the smartwatch market, the world’s biggest annual watch and jewellery trade show, which starts today, will likely end that.
After the successful launch of Apple Watch, global traditional luxury watchmakers, such as Omega, Tag Heuer and Rolex, may end up playing catch-up with the likes of Apple and Samsung Electronics to attract consumers in the market for new hi-tech multi-functional timepieces.
“Consumers are looking for smartwatches by their favourite luxury brands,” David Sadigh, the chief executive at Swiss marketing firm Digital Luxury Group, said on the eve of the opening of Baselworld this year in Switzerland.
Baselworld, which runs from March 19 to 26 in the city of Basel, brings together 1,500 brands from 40 countries and 150,000 attendees in a fair that will showcase the latest innovations and trends in the watch and jewellery industry.
The latest edition of the annual WorldWatchReport, published on Wednesday by Digital Luxury Group, showed that the luxury watch market has been impacted by the interest in the Apple Watch, which will be on sale from April 24.
The WorldWatchReport is based on an analysis of 600,000 relevant daily searches made on Google, Bing, Baidu and Yandex for 62 brands in 20 countries and territories, from January to December last year.
The report pointed out that consumers are looking for smartwatches from luxury brands Tag Heuer, Rolex, Omega and Breitling, despite no official launch announced by any of them to date.
Jean-Claude Biver, who heads the watch division at French luxury goods conglomerate LVMH, the parent of Tag Heuer, was cited in reports in January as saying that the Swiss watch brand was preparing to enter the smartwatch market.
Tag Heuer’s initial smartwatch will be the first-ever watch the company had developed outside of Switzerland, according the Biver. Selected hardware and software will be from California’s Silicon Valley. The design, case, dial, movement and crown will remain Swiss-made.
Biver described the Apple Watch as the “biggest threat for watches priced at less than US$2,000”, Bloomberg quoted him as saying.
The WorldWatchReport also said there was plenty of interest from consumers for German luxury goods firm Montblanc’s e-Strap, which will be released in June.
The e-Strap is an interchangeable strap, attached to a traditional mechanical Montblanc watch, that offers an activity tracker, smart notifications, remote controls and so-called find-me functions. It also connects via Bluetooth, to selected Android smartphones and Apple’s iPhone.
This strap is apparently similar to the T-band accessory developed by Hong Kong-based start-up Kairos Watches. The T-band has the advantage of adapters that fit onto various band sizes of different mechanical watches.
Kairos will exhibit its Swiss- and Japanese-movement smartwatches and the T-band at a venue in the vicinity of the Baselworld site. The company has partnered with Swiss Creative Lab, which promotes a range of small independent Swiss brands.
Sam Yang, the founder and managing director of Kairos, said in a recent interview that the brands most eager to partner with his company to adopt T-band or license the Kairos watch design “are those with a portfolio of watches that are sold under US$500”.
The new Apple timepiece collection includes the aluminium Apple Watch Sport, the stainless steel Apple Watch model and the 18-carat gold-encased Apple Watch Edition. The Sport model is priced at US$349 and US$399, the stainless steel model at US$549 to US$1,099 and the Edition from US$10,000.
“The Apple Watch Edition collection is an attempt to convey the image of Apple as a true luxury brand, but the business reality is different,” Sadigh said.
Sadigh expected Apple to generate 80 per cent of its smartwatch sales from models “priced less than US$700, a segment that will have more impact on American and Japanese watchmakers than Swiss ones”.
“Depite the turbulence of the past months, marked by the increase of the Swiss Franc, rumours of overstock and the announcement of the Apple Watch, worldwide consumer interest for luxury watches keep growing,” he said.
The WorldWatchReport said consumers are most interested in luxury timepiece models which cost between US$4,000 and US$6,000. Research firm Strategy Analytics earlier this month forecast total global smartwatch shipments to grow 511 per cent to 28.1 million units this year, up from 4.6 million last year. It estimated shipments of the Apple Watch will reach 15.4 million units to lead the industry.