very cool... even more reason why apple would be smart to make one with a screen and one with just a band. Band on one wrist, fancy watch on the other. Or maybe have its tech incorporated into a nice leather watch band and you can do both?
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It is quite clear from these two quotes that you do not understand. I'm not sure how many more times it needs to be said, but it is NOT about the features or the technology. Not gadget features, anyway. A new in-house movement? Sure. An LED display or streaming data to/from your phone? No. There are already watches that do this. And while I'm sure Apple will revolutionise that area like they did with phones the same logic cannot be applied to the watch market as a whole because the watch market doesn't function in the same way. The market that Rolex et al appeal to is not interested in smart watches with smart features.
I'll go back to my car comparison... Rolex are like Ferrari, they make incredibly desirable products with a prestigious history. Are Ferrari in danger of collapsing because their £600k car doesn't have a feature that a £6k car has? Absolutely not. Will Ferrari ever sell a £6k car to compete against others in that price range? Never.
It's a lost cause.
It's too bad we can't bet on this (i.e Rolex will go down in 5-10 years) matter really.
Sorry, I'm not trying to be or come off as an ignoramus here. Your points are very well made and I really do (thanks to your posts and doing a bunch of research on the subject in the past few days) see you have a absolutely one hundred percent valid point of view.
I may even drop by midtown/5th avenue and chat with some of the employees in these jewelry stores to get a bester sense of Rolex business model, customer base and revenue stream. I really don't know why I care so much but every time I deeply consider a new point from you, see it in a new way, etc., I still come to the same conclusion. Maybe the timeline is different. Perhaps it'll be 20 years. Maybe 30. At the least I think the signs will be clear in 10.
The car comparison doesn't work for me because those luxury cars can and do have most of the fancy bells and whistles of the cheap cars.
I think the horse comparison is more relevant. Long ago, a person may have really, really loved their horse. The heartfelt and personal experience of knowing, taking care of, riding it... but the world has moved on-- cars have dominated over the roads. Time to let go and move on. The fact that we're talking about wealthy folks bears no difference to this-- it's a bond to a device created by certain factors. I'm arguing that the very nature of this bond will come into question.
Let me take you to a different place here and see if you follow:
My feelings about this are connected to a pretty deeply-seated belief I have that these devices are going to become an inextricable part of our existence. Once we have a successful piece of wearable tech, it will *never* leave us. I don't mean that in a superficial way... I mean it in a profound, species-defining sense. The process of transhumanism is trickling in on us in a pretty discrete right manner now, but by the end of this century one probably will not be able to tell tech apart from person.
So my hopes for the iWatch and its future iterations is that it won't just be a simple combination of utilities we're already familiar with and expecting, but a casual and incremental introduction to a completely new way of thinking about technology. One that creates an even more, perhaps intensely intimate bond with its user. It's that new kind of bond that overshadows the powerful but ultimately more superficial bond a wealthy person has with a Rolex.
This is a vision that no company has had for its smart watch (like the Pebble or Gear, etc.), but I think Apple may have taken that step here.
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By the way where did you get the information that Jony Ives is a watch collector?
Any links?
This would be very interesting info so please share with us
Some of those sports cars don't have air conditioning or car radios, never mind features like cruise control. They appeal to "petrol heads". There is a similar group of purists in the watch market.
Again, these are the sorts of features and ideas that a watch purist doesn't care about. There is something far more attractive about the mechanics of a watch. You remove the moving parts and the mechanics behind a watch, you remove it's soul. You're not a watch enthusiast, that's fine. I'm not saying the iWatch won't be successful, I'm positive that it will be, I'm simply saying that there is enough of a segment in the watch market to keep the big players more than alive and well for the next 10 years, never mind 5 years like your ridiculous claim.
Not sure if the amount of Rolex's revenue that stems from the kind of purists you're talking about is enough to keep Rolex in a secure position-- this is why I'm curious to learn more about their business model. Can you find anything online that clarifies this? I'd be really interested to see it.
I don't think there has ever been a change in the market besides the recession and maybe the original wave of digital watches, which has ever had a chance at jeopardizing their business model. But the iWatch and other future smartwatches based on this new iWatch paradigm could expose some volatility in the "cheaper" end of the Rolex product spectrum-- a segment that could make up an essential (for operations) fraction of their revenue.
Perhaps the intense enthusiasts exist in large numbers, then again, there have always been intense Blackberry enthusiasts and still are-- and we all know that company is struggling to keep their head above water at this point. I understand the differences in these companies which is why I want to see some more numbers/details.
Understood that our conversation here is not over the success of the iWatch, just what degree it will be able to influence the high end luxury watch market.
Our difference seems pretty squarely focused on whether the iWatch could possibly be useful enough convince a certain percentage of people to abandon something that is already a passion to them in one way or another.
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A few companies work like Rolex. Herman Miller and Weber are two other examples.
These companies build exclusivity. How? Fix Price and restricted retail outlets. They control the price as well as the demand. Rolex produces 800,000 watches a year. 90% of them are Certified Chronometers. They have select retailers who have to abide by all Rolex rules. In short, the prices are controlled. You can rarely get a discount at Rolex dealerships (unless you are a good customer). The same for Herman Miller. 10-15% at most. If a dealer is known to discount, he will have his licenses revoked.
Rolex also has a lot of things that Apple learns from. Vertical integration. They are slowly buying up all their suppliers to have everything in-house. The jewels, the oil lubrication. They don't want to rely on the Swatch Group (ETA/Vajoux) for parts like Apple relies on Samsung. They also have a streamlined manufacturing process. There must be some head industrial designer there that designs the coil hair springs that are unique to Rolex's movement because it is definitely unique like an A5 processor or the Macbook unibody construction. They also designed a manufacturing process unique to them because they churn out hundreds of thousands of those hairspring. That part is called the Parachrom Blu hairspring and it is unique to Rolex. They're also the only ones who uses 904L grade steel instead of the more popular 316L steel. 904L also has a higher risk of allergic reaction than 316L. Some people just can't wear a Rolex due to their 904L steel giving skin rash. This is a very stubborn take like how Apple have insisted for years that the 3.5-4 inch screen was the most optimal. However, 904L has a higher hardness and durability. They also resists trends like Apple (up until now). They stuck w. the 40mm case width while everyone is going 44-46 (like everyone going 5" phablets).
I'm pretty certain Jony Ives studies Rolex's design and manufacturing. Again, Rolex builds 800,000 watches a year. The case is a unibody construction that requires milling the block of steel. There is a high tolerance of manufacturing precision to get all those certified as Chronometers (Swiss certificate for accuracy).|
I buy all kinds of watches but I can tell you a Rolex buyers picks a Submariner over an Omega Seamaster (which I happen to own and like) because Rolex is a 100% in-house manufacture. That means, they build the movement and case for themselves. They don't outsource it. Some purists will argue Omega is inhouse as well but that is a different discussion. Rolex does not share it's movements nor sell them to anyone else. E.G. Apple's A5 CPU being used by HTC. It ain't gonna happen.
They also don't have a million models. They have their Oyster Sports line, Oyster (datejust), Cellini. The Oyster Sports line have been pretty much fixed for over 50 years. Similar to Apple limited product line. Sure, you have variations like you have different iPod colors but the lines are pretty much fix; building "iconicism" You don't build icons with a thousand different things. They have memorable products and refines them for decades. A Porsche 911 is still the same design over 50 years. Like the Submariner. The Porsche 911 Turbo is the same for over 40 years like the Sea-Dweller. This is how you build pedigree, provenance, "iconic."
Then you bake in the history, in-house manufacturing exclusivity, higher grade materials (904L), fix price, you can see why Rolex sells better than others like Breitling, Tag, etc. It is a similar analogy why Apple sells Macbook Airs at a higher price than other ultrabooks. Some reason you get a better return investment on an Air as you can re-sell it higher on Craigslist 3-4 years vs a Dell. Same reason applies to a purchase of a Rolex sports watch. You have the presumption the price will be fix (guaranteed), it may eventually appreciate,etc.. I have no guarantee a $350 iWatch will sell for $275 in 2,5, 10 years but I know a Rolex will sell for 90% to 200% of what is worth later down the line.
No other Swiss companies have these ingredients that Rolex (as a single brand) has. The Swatch Group is like Google and their OEMs. They sell more watches as a whole but no one brand has the unique retail distribution, unique in-house properties, tight large scale manufacturing process as Rolex. Rolex also highly protects their patents, intellectual property like Apple.
I can probably go into similar case studies for Weber and Herman Miller as well but I won't. Some brands know how to build a cachet, command higher price and legendary reputation. It is like how Ikea will always have cheap $80 lounge chairs and while Herman Miller can sell $6,000 chairs all day long and will never be effected by IKEA. IKEA is no threat to Herman Miller as Apple is no threat to Rolex.
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Swiss watch industry annual revenue is 20 billion dollars.
Even if apple were to go after the Swiss watch industry rather than a different market altogether (what I think they will do), they would have to sell a whole lot of watches to dominate a large stake of the 20 billion dollar in sales.
Even if apple were to go after the Swiss watch industry rather than a different market altogether (what I think they will do), they would have to sell a whole lot of watches to dominate a large stake of the 20 billion dollar in sales.
Right now it appears he's wearing a custom JLC. I've always felt Apple designs things they would want to use themselves. This is why I think any wearable from Apple won't try to look like a traditional watch. Apple could never design something like the kind of watches Ive wears, certainly not at the price point they need to hit.
Yeah I don't want to wear some Samsung watch kind of a watch designed by apple.
Doubt jony Ives would either.
Wondering if your view on this is the same now. We're three years into the Apple Watch. Fossil's revenue is crashing as they're rushing to a new strategy (likely doomed). In just three years Apple has surpassed Rolex as the #1 revenue watch in the world by an estimated , with just one product line vs Rolex's many lines.
Swiss watches are holding up, but in a questionable "slump," and some are pointing to potential trouble on the horizon.
High end watches are still safe, for now. But what about Apple's next major hardware revision to the watch, enhancing it's industrial design appeal, and adding essential health features such as a glucose monitor? Do you still believe for certain that Swiss watches are untouchable by the Apple Watch?