An Illusion in Switzerland
It's a good time to be a ultra luxury watchmaker. Consumers across the world continue to value the craftsmanship and timelessness found in engineered works of art worn on the wrist. Young professionals continue to enter the luxury watch world with open arms (and wallets) looking to wear accomplishment and success. Watchmakers remain excited about the future as consumers associate luxury watches with ideals that go beyond price, materials, and marketing.
Just like a soothing sunset can be ruined with a particular cloud cover forewarning of an upcoming storm, there are signs that the luxury watch industry is about to experience the closest thing it has ever faced to an extinction level event. Only a few luxury watchmakers, including TAG Heuer and a handful of others, have bothered to even wake up and take in the lawn furniture. Switzerland is under the spell of a widespread illusion.
The upcoming storm is called utility, and Apple is at the front line of bringing it to the wrist. With Apple Watch, Jony Ive and company are looking to change the way we interact with technology, utilizing what some may say is the most efficient region of the body for a wearable device: the wrist. With proper line of sight and ergonomics, the wrist is arguably a better solution for a good portion of computing and communicating compared to carrying around 5-inch pieces of fragile glass in our hands and pockets.
The wrist's potential was discovered long ago as the modern day watch has been around for decades, yet we are now finding that the watch was only scratching the surface of what is possible for the wrist. Much of the luxury watchmakers' disregard for the upcoming utility storm relates to how the modern luxury watch industry has become complacent. Few watchmakers envision a world where consumers begin to look at the wrist as more than just a place for well-crafted jewelry made out of various alloys of precious metals and moving parts. Jewelry provides us a way to stand out from the crowd, be different, and show our personality, likes, and dislikes. Watchmakers are correct in assuming this type of emotion and feeling is hard to replace as price is largely removed from the equation entirely, leaving only the factors that Switzerland simply excels at: quality, care, timelessness, and prestige. The problem with this logic, however, begins to appear when considering that consumers desire only what they know. Today's wants and needs for the wrist are not good indicators for what will be in demand tomorrow. The world has never experienced personalized wearable computing.
The Apple Watch will likely change what consumers demand out of a device worn on a wrist. The convenience and ease of interacting with technology will just be too much to forgo, similar to how smartphones became the preferred phone over a device that merely handled voice calling. While nothing will change with the desire to stand out and represent one's personality to the world through objects worn on the wrist, the ability of those objects to not only monitor and record data, but simply help its wearer use technology will change the buying equation. Everyone will want utility on the wrist.
After initially dismissing Apple Watch as nothing more than a design student's class project, Jean-Claude Biver, President of the LVMH Watch Division and leader of TAG Heuer, has at least publicly shown concern that Apple may indeed be on to something with a device that puts utility on the wrist, although he continues to think the impact will be contained to the low-end, with ultra luxury watchmakers remaining relatively untouched. Swatch's co-inventor, Elmar Mock, who was responsible for positioning Swatch to address the Quartz Revolution in the 1970s, once again sees the sea change coming and describes it as nothing short of the most significant shift the watch industry has seen to date. The low-end of the watch market is worried, and rightfully so, but the ultra high-end continues to think that enough gold and craftsmanship will weather the storm.
Critics have said that luxury watchmakers have lost touch with their customers. In reality, luxury watchmakers have lost touch with themselves. Watchmakers stopped giving the wrist the imagination it deserved.
The transformation that the luxury watch industry will experience over the next few years will most likely occur much more quickly than people expect as desire can be a powerful motivator. Eventually, all watchmakers will be aware that the world has changed. By then, the first movers will have been relying on buzz and marketing to drum up support for mediocre products that may handle a few key tasks found in more complete utilitarian devices. The problem facing the luxury watch industry has been decades in the making: complacency and the illusion that the wrist would forever be a place for jewelry. The Apple Watch changes the equation by which quality will be judged. We will likely look back at this era with interest and intrigue, and wonder why luxury watch makers didn't see the upcoming storm approaching.
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