That was ETA's mistake.
They thought they were trimming off the low income dross and crippling their opponents, but because they voluntarily gave a profitable market to their opposiition, Sellita and everyone else now have much bigger businesses with which to innovate and overtake ETA and the Swatch group as a whole.
The fact that ETA withdrew originally also allowed a significant price rise (which ETA could have engineered and benefitted from themselves, if they thought about it).
So the irony was that ETA withdrew from supply of, for instance, the 2824, and Sellita could immediately charge a lot more for exactly the same ETA 2824 clone than they did previously.
It was clearly a mistake at the time, but is proving even more so as the opposition progresses.