Is it more convenient to read the time on a smart watch than it is on a mechanical watch with lumed dials then?
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Apple Watch vs Rolex
- Thread starter r0k
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The thought has occurred to me, but...
Maybe a possible analogue is the transition from horses to automobiles. There are still people who own horses, and many of them are passionate about the horses they own, and collect horses, pay lots of money for them, etc. So there is still a "horse industry" so to speak. But that "industry" is nowhere near the size it was when horses were the main means of transportation.
I'm thinking the same kind of thing could happen to the watch industry. Smartwatches, or some other type of wearable/mobile technology, are here to take over the function of telling time. A select few might still find interest in buying and collecting high-end mechanical watches, but the low- and middle-range watch industry is about to be squeezed out.
So perhaps not doom for Rolex, but Seiko, Citizen, etc, could be in trouble.
Reading time, by itself is not more convenient. But a smartwatch has many other functions in addition to telling time. If you own a smartwatch, then a conventional watch is redundant. I know I would never go back to wearing a regular watch as long as I have a smartwatch.
No. Well, not while carrying a cup of coffee and walking to work at 6 AM -- it's easier to read my Seiko diver than it is to try to turn and activate my Apple Watch.
TAG Heuer is hoping there's enough interest in luxury smartwatches.
Which I think is hilarious, because people have crowed enough about Apple's steel Watch going past a thousand bucks, yet TAG is aiming at the low-$2k range.
There were also a lot less people on earth when horses were considered a primary transport in the western world, so it's a very difficult analogy to gage.
Do you have any idea how popular Seiko and Citizen are, especially in the homes of world electronics, Asia? Seiko also sell luxury watches that are perhaps more popular in Asia than Rolex, heard of Grand Seiko? These are markets where wearables and gadgets are commonplace and been tried and tested way before western markets have been introduced. Watch sales are up worldwide in 2015, so so far the market hasn't shown any signs of shifting.
No disrespect here but if you are claiming to never wear an ordinary watch again, I would suggest you were never a watch enthusiast in the first place. It was a convenience accessory and that isn't always what is attractive about owning a nice watch. Smart watches are a screen in a case on a strap. They don't have the personality or allure many high end watches bring and in fact mid range time pieces. They do a lot more in terms of functionality, but there is not yet a smart watch on the market that competes in the aesthetics department with some of Switzerland's finest. That isn't even a subjective statement. This is where a smart watch will struggle in attracting a position of status, prestige and attraction.
The watch industry is absolutely huge, bigger than perhaps the smartphone industry combined. It's a massive market to reduce to a 'select few' as you put it.
Tag Heuer make some nice watches but are still considered mid range watches I would say. They very much went after the fashion consumer in the 1990's and haven't quite recovered from that.No. Well, not while carrying a cup of coffee and walking to work at 6 AM -- it's easier to read my Seiko diver than it is to try to turn and activate my Apple Watch.
TAG Heuer is hoping there's enough interest in luxury smartwatches.
Which I think is hilarious, because people have crowed enough about Apple's steel Watch going past a thousand bucks, yet TAG is aiming at the low-$2k range.
Unless another device comes along that does the same job without having to wear anything on the wrist first. Wearables can be anything: a pendant, or a necklace, or a bracelet, or a cufflink, or a shirt button, or even a woven into the fabric of the clothing. And frankly in my mind that's much more likely than the smartwatch becoming the de facto "wearable".
I like GSs as well. I think when the average person says Seiko and Citizen, they mean the lower end stuff.
So if you replace "Citizen" and "Seiko" in the above response with "lower-end watches", it makes sense. The higher end stuff are in the same category as other luxury watches.
And you'd need to look at adoption/penetration after a few more years, not 2015. iPhones got to 20% penetration after 4 years (not instantly as some would have you believe). So, too early to say if it's making an impact or not.
Agreed that smartwatches don't compare favorably with traditionals in the beauty department.
Then again, us watch enthusiasts are a small minority.
So the question remains--will AW, with its pleasing-but-not-beautiful-exterior but massively more useful features, win over beautiful traditional watches? Will the AW create a new market and the traditional watch market shrink as a result? And to what degree will it shrink (if at all)?
The watch industry is absolutely huge, bigger than perhaps the smartphone industry combined. It's a massive market to reduce to a 'select few' as you put it.
So, a potentially tasty market for companies like Apple to try to disrupt
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No disrespect here but if you are claiming to never wear an ordinary watch again, I would suggest you were never a watch enthusiast in the first place. It was a convenience accessory and that isn't always what is attractive about owning a nice watch.
>snip<
The watch industry is absolutely huge, bigger than perhaps the smartphone industry combined. It's a massive market to reduce to a 'select few' as you put it.
You are right that I was never a watch enthusiast in the first place. And maybe that is why I'm skeptical of your claim that the luxury watch industry is so "huge." To me, luxury watches have always seemed like a niche market. I look at an expensive watch, I feel like I'm seeing the Mona Lisa or something. Beautiful, great art, high craftsmanship, but I don't want the Mona Lisa on my living room wall, and I don't have any urge to wear a fine mechanical watch. But I do understand that some people do like that kind of thing, and I think there would always be a market for top-end mechanical watches. But the mid-range ones and lower, I think would be squeezed out, like horses were squeezed out by automobiles. And btw, I'm from Asia, which is why I mentioned Seiko. It's the first name that comes to my mind when I think of mid-range watches. I vaguely know that they have expanded into higher range, but the image I have of them is that everyone had a Seiko watch. And most people who owned them were like me -- they were just wearing one to tell time, it was a utility gadget to them. They wouldn't hesitate to switch to something else, if that something else was more useful.
For the price of 1 Rolex, I can buy a life time of Apple Watch and still be ahead.
Interest (when it normalizes to historical norm) gained from the price of Rolex will pay for Apple Watch, and you still get to keep your cash.
Still ahead? How are you ahead if you are replacing the watch every couple of years and by what metric?
If ahead means happier in your own mind by owning the latest and greatest disposable gadget then that is ahead on those terms. If you are judging it on functionality and cost then you are not the target market for Rolex in the first place. Neither party loses here.
I think what he meant was that if he bought an Apple watch every few years for the rest of his life, it would still cost less than buying a Rolex. Not knowing the price of a Rolex, I don't know if his math is right or not.
The lower end are most at risk I agree, sub £500. This is why I feel the mid to high end of the market are looking forward to smart watches introducing people to the industry. It will ultimately attract buyers to their brands too.
Seiko have been in the luxury market for many years now. It's not a new approach for them btw.
I understood that part but not the meaning. He meant ahead in terms of cost so that means he falls into the latter of my previous comment. He isn't a significant consumer in regard to Rolex because he was never going to spend £6999 on a lower range Rolex anyway.
I suppose he is an example of a consumer who isn't going to affect the way the market goes in years to come.
Yup. The general public thinks that TH is "luxury", but they're also grouping it with Gucci and Louis Vuitton, which themselves turned into "midrange" in my mind once I walked into the fancier shopping mall down the street.
I think where we disagree is what will happen with the medium market. I mean, if you own a steel Apple watch with a link or milanese band, that to my mind is nice enough to wear to all but the most formal events. So why would someone with a $800-$1200 Apple watch buy a traditional watch in that price range? I don't see that happening.
Sample Assumption:
- $10k Rolex, $600 servicing cost every 5 years
- $1k for Apple Watch Stainless Steel band, replacing the Watch itself every 2 years for $600 and keep the band
Initial Cost outlay:
- difference of Apple Watch vs Rolex: $9k
- Invest the $9k in a 2%/year term investment (example, select a 5 years term product): you get $180/year
Buying Apple Watch every 2 years and not own a Rolex
- $180 x 5 = $900 (interest income)
- $600 (not servicing Rolex)
= $1500 every 5 years from NOT owning a Rolex
Buying Apple Watch 2.5 times at $600 each = $1500 over same time period
How much you are ahead?
- Scenario 1: whatever you can sell a 2 years old Apple Watch for (say 50%, you are ahead by $300 every 2 years, or you are ahead by $750 for the same 5 years time period)
- Scenario 2: Apple Watch is not refreshed every 2 years, but 3 years, you are ahead $500 from prolonged refresh cycle, plus whatever you can sell the 3 years old Apple Watch for (for example, $200, then you are $700 ahead over 5 years)
- Scenario 3: invest the $9k wisely, have an average return higher than 2% and you win
EDIT: someone said Submariner servicing is almost $1k now? Then Apple Watch wins more financially
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I have never doubted the Apple Watch is cheaper to own. That is a no brainer.
Your definition of 'ahead' is purely based on cost, whereas I would say 'for me' being 'ahead' is owning a nice Rolex watch and enjoying it, because I like them and appreciate mechanical watches in general. On that front it's subjective.
A Rolex service used to be every 5 years but has been amended to every 10 years now under their guidelines.
If the servicing every 10 years is $1000, the analysis is the same.
If the servicing every 10 years is $600, then the 2 options are indifferent assuming 2% rate of return on the $9000
Financial is something we can compare fairly - personal satisfaction is something we don't need to analyze as it is subjective and different from person to person.
Interesting point. Did you see that movie "Her"?
I did, and exactly why I made the point. I did think it was odd not to see any watch or watch-like devices, but hey, it could be the way to go.
Indeed, but as I said previously, if you are comparing a Rolex and an Apple watch purely financially in order to justify which one is better for you, you were never going to be a Rolex customer in the first place. You are not the type of individual who could cause concern in the Rolex boardroom.
My thought was always that the AW would carve out the middle of the price ranges.
Low-end, say anything less than $200, would likely stick around. If you just need to know the time/date and didn't want to spend too much money, you could get a digital watch or Swatch for very little money. So AW doesn't play here.
High-end, anything greater than, say, $1,000-$1,500, would likely stick around (and perhaps shrink over time). Again, if you're spend this much money, you're likely not thinking about the price or just need to tell the time. Here, the appeals of luxury (brand, heritage, longevity, quality, personalization, status, etc etc) is what makes people buy these watches today.
The mid-end, well, that's ripe for disruption.
Check out the stats on Swiss Watch export by price point: http://www.fhs.ch/scripts/getstat.php?file=histo_gp_150606_a.pdf
1CHF is roughly 1USD.
Look at 2014 numbers. Note that the bulk of units shipped were for watches that's 0-200CHF (18.4M units). The 200-500 CHF and 500-3,000 CHF segments shipped less units, and is likely where the AW plays (and more in the 200-500 CHF segment). Of course, you'll see that most of the rev is in the 3,000+ CHF segment.
So this type of stats on Swiss, German, and Japanese watches is something to keep a note of going forward.