Elmar Mock is one of the inventors of the Swatch (the “stylish watch”). He warned in March that Apple might cause an “ice age” for the traditional watch industry with the advent of its sophisticated new timepiece.
Apple Watch kills luxury
In June, retailers sold $375m worth of watches. That’s a year-over-year drop of 11%, according to NPD. The decrease reflects a 14% decline in unit sales – the biggest drop since 2008, according to Fred Levin, who heads NPD’s luxury division.
“The Apple Watch is going to gain a significant amount of penetration,” Levin told Bloomberg. “The first couple of years will be difficult for watches in fashion categories.”
Swatch will also be releasing a line of smartwatches. One model will offer smartphone-style notifications. Another will feature NFC payments.
Levin also said that the Apple Watch wasn’t the only reason for the downturn in traditional watch sales. He pointed to market saturation as an additional cause for the decline, noting that brands such as Timex, Guess, Tissot, and Burberry suffered as retailers offered steep discounts.
“In the short term, brands at accessible price points are going to have to think very seriously,” he said.
The NPD U.S. watch data is based on sales estimates of about 70 brands throughout department stores, independent jewelers, and national chains. The data does not include sales information from boutiques owned by watch manufacturers or chains such as Wal-Mart and Target.
According to the data, watches that cost less than $1,000 will see the largest drop. This makes sense, because they’re typically purchased for function over form. Pricier watches are often purchased by people who have means as a status symbol.
Watches that cost between $100 and $149.99 saw a whopping 24% decline in June, the report said.
Buying the Apple Watch
The Apple Watch retails at an average of about $500 per piece. The Apple Watch Sport averages around $382. Mid-tier Apple Watches average just over $700.
It’s difficult to state the specific extent of damage that Apple is inflicting on the traditional watch industry. That’s because the firm, in an effort to prevent competition, won’t release unit sales information.
Dubbed as Apple’s “most personal device yet,” the Apple Watch offers many of the same benefits of a smartphone, but as a device that’s worn on the wrist. The watch is first and foremost an “incredibly precise timepiece.” However, it also features communications technology, fitness assistance, Apple Pay, and Siri.
Apple Watch is available for purchase at Apple stores.