Reply With QuoteDefeats his point by using Rolex as the hook, but it could be true of some brands...I guess. This has been debated to death hasn't it?
Sensational article based no doubt on a press release by the author of a report that predicts... "Rolex may follow the lead of fashion companies like Chanel and expand into non-core products to make up for the losses brought on by wearables."
Rolex is suddenly battling one of the biggest threats in history
1969 marked the beginning of a revolution in the watch industry.That was the year the Japanese watchmaker Seiko introduced the Seiko Quartz*Astron 35Q, the first watch to be powered by an electrical oscillator regulated by a quartz crystal. It took nearly 10 years and teams of engineers to develop. But upon its release it immediately ushered in what is referred to by people in the watch industry as "the quartz crisis."
Until Seiko's Astron, Swiss watchmakers were king. In 1970 there were more than 1,500 Swiss watchmakers. But by the height of the "crisis" in 1983, their numbers stood at a mere 600. The rise of the Quartz watch ultimately pushed Swiss watch companies into the luxury market.
According to Andrea Squatrito, the founder of RE Analytics, a big*data intelligence boutique based in Milan, new technology is once again drawing a battlefield for Swiss watchmakers. Squatrito's report called "Rolex: An industry under threat" outlines how the rise of smartwatches may pose a new threat for Swiss watch brands.
Squatrito's report identifies two main business segments for Rolex in particular: "people who are buying watches in the 2,500 to 11,000 range and people buying watches in the 23,000 to 33,000 range" (one euro is worth $1.06). Together these two segments account for 83% of the company's business. Squatrito believes that Rolex's lower*end watches, which make up 45% of the company's customer base, are at risk of being challenged by high*end wearables like the Apple Watch Hermθs.
"There are touch points in the lower end of luxury watches and the higher end of wearables," Squatrito said. "The Apple Watch hasn't reached its full potential in terms of sales yet but there are signals that Swiss watch makers may soon see a large portion of their business threatened," Squatrito added.
Squatrito does not think the end is nigh for Rolex and other Swiss watchmakers. But he does think that increased competition from premium smartwatches will force them to make big changes. "For instance," he concluded, "Rolex may follow the lead of fashion companies like Chanel and expand into noncore products to make up for the losses brought on by wearables."
Defeats his point by using Rolex as the hook, but it could be true of some brands...I guess. This has been debated to death hasn't it?
I predict a stand off, as traditional luxury and smart watches are competing for wrist space, but are not competing directly with each other. One is for looking good, the other is functional, and will only get so far while tethered to a phone. Even after it breaks free from tethering it will be limited by screen size, and competing with other options such as AR glasses. Many will own both traditional and smart. But sure, why not leverage that brand recognition. The real question is if they could put their logo on anything more meaningful than the odd hat, t shirt, cuff link, baseball cap etc.. There's obviously a market for it as the odd branded wallet tends to be bought when they come up. There's even a roaring trade in empty boxes, for some reason ;-)
It's all speculation though in the end, and Rolex may (wisely) prefer not to cheapen their brand by spreading the logo too thin. The only thing that's certain is that I'll be having none of it.
Some brands have managed it quite well, Rolex is still one of the worlds most recognisable luxury brands so I could see it working. The problem is they don't move quickly enough to change, this served them well during the quartz crisis, whether it will in this new 'connected' era is yet to be seen.Originally Posted by Itsguy
I could see the other watch brands owned by Richemont and LVHM to do it better and quicker because they already have brands producing a wide spectrum of luxury goods. Anyone for a Panerai Man Bag?
I am not convinced that ever more advanced smart watches will threaten the luxury watch market anytime soon TBH.
When you look long into an abyss, the abyss looks long into you.........
I tend to agree, but a crystal ball looking ahead say 100 years would be very interesting indeed.
I agree. Many of my friends have smart watches but these are people who are constantly punishing themselves; obsessing with being healthy, calories, jogging etc... People who wear luxury watches seem to just get on and enjoy life. I think these are mainly different demographics with just a bit of overlap. I may be generalising, just my POV.
Firstly I'd like to know where he can buy new Rolex watches for 2500 because I'd be after a few of those!
Secondly, and as posted earlier, I think wearables are likely to compete with the lower end of the market. High end smartwatches are probably going to be as widely seen as Vertu phones. There will no doubt be some sales but not enough to put a dent in the luxury watch brands.
That's how I see it but I'm sure others will see it differently.
I'm reading your post while trying to forget about the pain in the right knee cap having done something nasty while marathon training. I have thought about an Apple Watch But I often run with a diver watch as a backup just in case the battery drains on the iPhone.
I do spot a lot of runners who go for the expensive running gear tend to have Apple or fitbits.
OK, how about a watch that has:
1) A battery life of one week.
2) Always on display.
3) Waterproof to 100m.
4) Health monitoring - sleep monitoring, heart rate monitor, temperature, blood pressure monitor, blood sugar monitor, calorie counter etc
5) GPS and altimeter.
6) Payment facilities.
7) Connects to the mobile phone network untethered.
8) Steams all music (Spotify, Apple Music etc) to your bluetooth headphones.
9) Has an actual high-level artificial intelligence assistant. Not Siri, not google now, not amazon alexa, but an assitant that understands you 99.9% of the time and just works.
and finally
9) Designed by world-class designer who creates a modern classic.
I'm pretty sure that still wouldn't convince you, but any future-facing industry will be concentrating on where the puck is going, rather than where it is now.
I own 2 smart watches most of the time I just want to well..............................tell the time
Hi Mark
Wishing you a speedy recovery.
Smashed my knee playing karate a while ago and they can take ages to mend as I am sure you know.
Best wishes
Gary
I previously said that Rolex would do a smartwatch (half-jokingly). Whilst this article is hardly persuasive in and of itself, I still say (seriously) that it is a matter of when, not if, Rolex will do a smartwatch.
I also said that quartz will make a comeback with Rolex but quite possibly only in smartwatch form.
I am slowly coming to the point of view that smartwatches will be a game changer for the higher value luxury watch market (seemingly paradoxically lower value specialist/tool watches and lower value watches in general might have greater resilience for the time being). Perhaps we here on this forum don't see the wider picture enough to see this as yet but I think the initial signs of it, including right here on the forum, are nevertheless present.
Luxury mechanical watches are not going to go away entirely but they are going to be increasingly supplanted by luxury smartwatches and it is possible that luxury mechanical watches will move further up the value chain and reduce in new sold volumes.
I'd rather cut my own face off than wear an Apple watch over a mechanical, and I'm a big apple user. I've lasted 36.5 years without all that sh*t on my wrist, I'm pretty confident I'll manage without it.
Surely Rolex and other high end marques produce high q engineering for jewellery watches,smart watches and the like are the same as the ones on your cooker-functional,disposable and cheap.is this not a completely different market? You can buy the print of the dogs playing poker or an old master,they both sell.
That is one current view. But views and perceptions will change and already are changing.
It's all about perception.
Change is a certainty.
Why should smartwatches be cheap? First of all they are already not particularly cheap in my view and if they are intended to be sold as luxury items then they will simply be priced higher, price soon being a justification in itself just as we have seen with luxury mechanical watches.
We here on this forum and forums like it look backwards, to be brutally honest. There are millions more (many of whom are already luxury watch buyers but not enthusiasts) who do not care about our views of history, pedigree, or whatever. They are tomorrow's buyers of luxury personal wear and I think that will almost certainly include luxury smartwatches. The market direction is already in place.
Ironically the only thing that could scupper the future dominance of luxury smartwatches is further technical advances, i.e. (as I have observed before) the continued ubiquitisation of computing. 'Everyone' has a smartphone now and smartwatches are selling well, but computing devices will become more and more ubiquitous and more and more unnoticeable, i.e. woven into everything we see and do without even noticing or realising it, both in terms of what we wear or carry with us and in terms of our physical surrounding at home, in transport and on the street. In this respect, luxury smartwatches may become more like luxury mechanical watches already are: A (very) desirable to some anachronism.
Time will tell. But I am increasingly sure that luxury mechanical watches will be gradually supplanted by (not entirely replaced by) luxury smart tech.
My only thought on this is that the whole concept of tech watches is much more of a younger-generation thing, but then there's younger generations coming up.
As for Apple Watch Hermθs... LOL!
R
Ignorance breeds Fear. Fear breeds Hatred. Hatred breeds Ignorance. Break the chain.
When I run I want to know my heart rate my average time per mile and how many miles I have done. My rolex stays at home and I run using my Garmin as it it the right tool for the job. I ran the london marathon last year and honstly don't think I could have done it without my garmin.
I always try and push myself but I also get on and enjoy life.
Indeed, it is the young who drive development and direction because they are the middle aged and wealthy of tomorrow.
Increasingly it seems to me that businesses that are not already selling to the young of today have a questionable future. The rate of change in all sorts of areas, which favours the young, has been constantly accelerating for many years now. (Yes, for the avoidance of doubt I mean that the rate of change itself has been accelerating, not merely that change is rapid).
To my mind the real question is: Will the young of today retain their current preferences as they get older (preferences that are currently predicted on a constantly fresh stream of new and shiny, new and shiny) or will they instead age such that their preferences change and 'mature' to more closely parallel the generations that went before them?
I am undecided. It would be silly to over-generalise and some people will age in one way, i.e. keep their new-model preferences, and others will age in a more conventional way. But which, if any model, will be dominant? Until a few months ago I thought that the conventional model would be dominant: I thought that the young would age to more closely resemble the previous generation. But I think my view is changing. This is because change in the world (the growing synergy of technological and social change, connectedness, etc.) is such that older personal possession and value preferences are perhaps beginning to make less sense. This means that luxury items will not go away but what is perceived as worthwhile luxury may change.
The way I see it, people buy an automatic Rolex watch because it has the possibility of lasting 50 - 100 years and still be functional, appealing, useful and retain a percentage value, therefore it is easier to justify spending £5000 on a watch that does this.
Consider a Rolex smart watch of the same value, will it last 10 years before being unable to connect due to a new protocol, the battery dying, the graphics looking old? Computers are ancient at 7 years old, phones are mostly old hat at 3 or 4 years now. If it doesn't work it then becomes an expensive momentary trinket, it may have a value, but surely just a scrap value. They might get around this by making a module that is updated at service intervals, but the pace of technology now would make this a relatively expensive proposition.
If they venture into it all all, i think it'll be very niche, much like the Vertu mentioned earlier.
At the Old Bond St Xmas bash I was given Rolex branded chocolates and a Rolex pen.
The milk chocolate ones were good (the dark less so) but the pen is mehhh.
Those are good, rational questions and points.
They also don't matter at all. ;-)
No, I'm not being provocational. Really! It's just that they are arguments against luxury smartwatches from a very specific position. There could be and will be arguments in favour of smartwatches or newer forms of luxury items from many, many more positions. Indeed, when the time comes (and it has already begun) the arguments won't be explicitly made for the most part; they will simply be an implicit part of the zeitgeist.
The nature of game changers (I might say 'paradigm shifters', to use a phrase that has somewhat fallen out of fashion and been replaced by 'disruptive' technology/ideas) is that they change the thought model on which people make decisions. All of a sudden, what went before is irrelevant (no less useful, no less practical, no less pleasing, no less aesthetic, etc. but just irrelevant) and new models of choice and preference take over.
In this context, it has already been noted that the young increasingly buy for experience, not for possession. Thus it may well be that the drawbacks you correctly identify above about luxury tech simply become irrelevant to future buyers. The drawbacks may still exist and the relative benefits of older mechanical luxury tech that you identify will still exist, but those benefits of older mechanical tech will have become irrelevant. A new model of choice and preference will have taken over.
Maybe.
The question of will the young age to be more like the previous generation or age to retain their new preference models? is still unanswered (and is unanswerable perhaps at present). A bit of both is likely, I think. But what that will entail in practice I don't know.
Last edited by markrlondon; 20th January 2017 at 22:24.
I still think 'old money' will go for the lure of fine timekeeping engineering/horology/design and tactile value over controlling or viewing your world via smart watch.
There is room for both for sure, maybe one day Rolex will be regarded as steam punk?........
When you look long into an abyss, the abyss looks long into you.........
Isn't it already be a great many people, and increasingly so?
Haha - perhaps, but not for us dinosaurs who reside on the various watch fora (for now).....
When you look long into an abyss, the abyss looks long into you.........
Quite but, as you say, "for now". :-/ And enthusiasts like us never were or are the main buyers.
I like your argument, and it's a very valid possibility and I also understand I have an invested viewpoint myself, along with most others on here.
It's an interesting point that carries a bit of weight, I think, that the younger generation are investing less in the object and more in the lifestyle it enables, constant connectivity, monitoring and access to global communication.
It remains to be seen whether the big Swiss cheeses can capitalise on this with essentially the same tech rebranded. I think that with your point that it's the resulting experience and not the item's possession that controls the purchase, I don't see how they could justify the additional expense on a Swiss branded piece of tech for the same end result, unless they explicitly wanted a rolex smartwatch? This must be a very small demographic, though no doubt a profitable one. enough to justify the R&D costs? maybe not, which means back to rebranded bought in tech..
A Rolex smartwatch is only ever going to appeal to a market that wants to buy a Rolex smartwatch because it is a Rolex smartwatch, due to the longevity it can only be for the cachet, therefore it is the thing that is primarily driving the purchase..
I think!
I don't think that Rolex is going to build a smart watch at all. Neither do I think that tech is much of a threat. If any.
+1
I agree c.
When you look long into an abyss, the abyss looks long into you.........
^^ Finally, some sense.
I Agree and I own a few smartwatches
I do and I think it'll be branded Tudor.
The very thought of a watch that can play your music collection sends shudders down my spine. A sure sign that I am getting too old for this world.
It is of course possible to embed a video camera into one of your dental fillings, so you can keep a record of your most joyous moments - but just because you can, doesn't mean you should.
There has been no sensible rational to own a mechanical wristwatch for at least the last 20 years. Yet we still buy them.
Mark, good points as ever, but I disagree this time.
What about precious metal jewellery? That dates back to a time when the only way of making something shiny and beautiful was with rare gold and silver. Now any factory in China can pump out a shiny and detailed piece of jewellery for 50 cents and it's been that way for 50 years or more. Yet more people are buying real gold jewellery than ever.
Maybe because they value something intrinsically special about the 'real' thing? Maybe even in the future enough people will always see good mechanical watches that way?
The automatic watch industry may will be facing that challenge, however, I am not sure that Rolex is the best example to mentioned here. As far as I am concerned there were able to survive the quartz crisis with minimal losses and even got stronger out of it.
I don't think their status would let any harm happen to them. But then again, I may be wrong.
I don't see smart watches as a threat to the luxury market.
Its like saying a pair of nikes with a pedometer built into them is going to etode sales of Jimmy Choos.
I have been thinking about this and have come to the conclusion that the smartwatch concept is itself very dated, since it is based on the traditional mechanical/quartz wrist watch concept (small square/round block on a strap located on the wrist - not very innovative!). What we will probably see down the line is a revival of the Google glasses idea (or probably something much more innovative giving a continual 'headship display' of everything we currently want from a smartwatch and much much more). Thus will free up our wrists (since a digital replica of a 'watch') won't be needed, and mechanical/quartz watches will have a resurgence since we seem to actually like to adorn our wrists with something ....
.... or of course not ....
If the threat from the smart watch industry became that big, I'd imagine that before Rolex start selling handbags and scarves, they might look to join the party and make a smart watch themselves.
Any wrist watch is an anachronism for a lot of young people - check out next time you see one, how many actually wear one.
The wrist watch may go the same path as the fob watch a while back.
Martyn
That's a good point. Hardly any of the kids at my daughters school have a watch on their wrist. They all use their phones by default.
The timeline on the demise of the mechanical watch is a long one IMO so we are all ok for a good while. By the time Rolex and the others have stopped making our type of thing we'll all have popped off and the younger generation who will have taken over probably won't even notice.
There will still be enough 'vintage' watches around to keep the few enthusiasts happy.
Seems like a lot of opinions are that if Rolex expanded to smart watches, they'd make something similar to what already exists. One of the reasons I find Rolex history so fascinating is that they didn't just design watches that copied existing technologies, they designed watches that could be taken to environments where watches hadn't been before.
I think that's what I'd love to see, whether from Rolex or someone else, a smart watch that pushes the boundaries of what a smart watch does. The company that makes a smart watch for the first person on Mars will surely be a lasting one in the history of smart watches. Or perhaps that person will just wear a Rolex Explorer.
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I read a very interesting interview in the FT with a young techie called James Proud who thinks wearables are a passing fad. His basic point was that the tech is never gonna be as powerful as your smart fone and will always be more fiddly to use. His argument really chimed with me. For example it's always gonna b less hassle to wear a fitness monitor and check the results on ur smart fone than on a small screened smart watch.
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Agreed. Two separate markets imo. I'd think that a lot of people will own smart watches with no interest at all in luxury mechanical watches. Or you'll have people who own luxury watches who wouldn't bat an eyelid at dropping £500 (or whatever they cost) on a smart watch to add to their collection.
^^^ this ^^^
The article was discussed on a Dutch site as well. The idea of a luxury watch has to do with the fact that men don't wear jewelry (in general, that is) and that a nice watch has just the appeal of a piece of jewelry. And if there's Hermes of Bulgari or... on it, it never changes the fact that it's 'simply' an Apple. Most Hermes Apples will be bought by people already owning a (or more) expensive watch(es). It will not replace the traditional watch; it's an add-on.
Remember the Aston Martin Cygnet? A Toyota Aygo. The concept of a run-of-the-mill car with an expensive makeover and badge never really took off.
Menno
Perhaps the more interesting part of this discussion is not the smart vs luxury mechanical debate, as they clearly both have their strong points and markets, but the question of what other products watch brands could create without cheapening their brands. I must admit I recently picked up a promotional Audemars Piguet pen that apparently had originally been a gift at Basel, but this was on eBay and I doubt I'd have felt the same if it was in a shop for a high price. I'm also using a Rolex leather paperwork holder as a mouse mat, but mainly because it was nearby when I needed one and it works. Again, I wouldn't have bought one in a shop, and seeing one in a boutique would give it bit of a bargain basement feel.
I wonder what products which brand could get away with. Something genuinely mechanical other than a watch would be interesting. Jewellery, cuff links, accessories, pens, wallets and so on seem most obvious but I can't help feeling it might feel tacky, there's something a bit low rent about farming out a logo unless it's just right, and I wouldn't want Rolex sunglasses any more than I'd want a Gucci watch. Any thoughts?
Luxury mechanical watches are not going to go away entirely but they are going to be increasingly supplanted by luxury smartwatches and it is possible that luxury mechanical watches will move further up the value chain and reduce in new sold volumes.[/QUOTE]
Which makes buying these watches now a better investment as values will continue to rise!
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Last edited by leahorsfall; 21st January 2017 at 23:58.
+1
Why buy a watch that needs charging?
I've got a phone for apps and stuff
Why buy a watch that's not waterproof?
Part of owning a luxury watch is the fact that I'll eventually pass something of value onto my son.
Smart watches, like most technology, will quickly become obsolete and eventually have no value whatsoever (Nokia 3210, spectrum 32) whereas most of my watches will appreciate.
And they look crap, have no history, character or class!!
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If anything I suspect that the big swiss manufacturers will (very successfully) market themselves as the antithesis of wearable tech.
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