Traditional watch sales slowing Key Banc chart 001

When Apple’s design chief Jonathan Ive opined ahead of the Apple Watch unveiling last year that Switzerland was in trouble, many commentators waved off the comment as pure marketing talk.

But surveys cited in today’s note by Key Banc researches clearly show that a much stronger-than-anticipated reception to the device may indeed give fashionable watch brands a pause.

The truth is, sales of traditional watches have already slowed as would-be buyers were holding off purchases in the wake of the Apple Watch’s arrival.

Apple’s device will be “highly disruptive” to the traditional fashion watch market, reads the note. “At a minimum, the widespread buzz may cause something of a standstill in the watch market.”

“We do not believe retailers in this case, and by our deduction, Fossil and Movado, have explicitly factored in any level of cannibalization,” it continues, noting that the level of disruption “could be significant”.

As a result of the successful Apple Watch launch, which went on a pre-order spree last Friday in the United States and several key markets around the world, the research firm has reduced its estimates for Fossil and Movado.

As opposed to the fashion watch industry’s significant growth in the 2010-2013 timeframes, sales have now slowed to low single-digit in 2014. Apple’s foray into the wearable market will only add “incremental pressure” on an already squeezed market.

“The Apple Watch could give rise to an industrywide contraction. This has some historical precedence; we note that the quartz crisis in the 1970s caused significant dislocation and contraction in the Swiss mechanical watch industry,” the research firm weighed.

Traditional watch sales slowing Key Banc chart 002

According to a survey by Slice Intelligence, Apple has collected more than one million pre-orders for the Watch in just 24 hours in the United States alone, all in the face of constrained supply.

Based on initial pre-orders, Apple will become one of the top three producers of >$200 watches in its first quarter of this year, said Key Banc analysts.

Remarkable, isn’t it?

“In bragging about how cool he thought the iWatch was shaping up to be, he gleefully said Switzerland is in trouble.” The New York Times’ Nick Bilton paraphrased Apple’s Jony Ive last September, ahead of the official Watch unveiling.

Source: Business Insider

  • barreknarr

    Could have to do with the fact that the Swiss Franc was put out of relation to the Euro a few months ago. The franc skyrocketed which affects the export negatively.

    • Yeah, sure is a factor but then again sales have been declining in past two years

      • lemonhead

        Yeah, it’s not just a factor it makes ~30% sales so, to each his own haha
        Not watches particularly but the overall swiss export market. (local here)

        But what really gets the swiss watch market going aren’t any “cheap” watches like around 500francs. it’s IWC & Rolex and what not (15’000 upwards) and that’s not gonna change anytime soon 😉

  • Rowan09

    I believe the Apple Watch is just the beginning, like the original iPhone. Apple didn’t put in all the sensors they wanted to include for whatever reason, so I can only imagine how it will be when it’s more developed.

  • blah blah blah blah swatch watch blah blah blah blah important blah blah blah blah blah blah blah blah blah apple blah blah blah blah blah blah blah blah next gen blah blah blah blah blah blah blah blah

  • hkgsulphate

    next one, iTV

  • John Smith

    Apple dominates any market it makes a product for!

    • burge

      Not quite
      Ddn’t it make a game console once that didn’t really work and what about the Apple Newton that got pulled as well because it didn’t sell. Yep apple does dominate.

      • Don’t forget the hobby project Apple TV. Sure it’s gotten more and more (mostly US-centric) content over the years but is still behind most of their competitors and definitely not a market leader…

    • mrgerbik

      brainwashed turd – dont you understand that corporate domination can be a really bad thing?

    • Dhoklastellar Fafda®™

      Yeah they dominate tablets. Not.
      They dominate laptops. Not.
      They dominate LCD screens. Not.

      • Rowan09

        They don’t make LCD screens and they do dominate tablets by far.

  • Dhoklastellar Fafda®™

    Ok now the Swiss will have to slash the prices of their watches to stay in the game. Gone are those days where people paid top dollar for mid range models. Im not talking about the rolexes. They are a class in themselves and should never bow down to apples pressure. But the rest of them, theyre gonna sink off if they don’t reduce prices now to get things moving.

    • George

      You couldn’t be anymore wrong.

      • Dhoklastellar Fafda®™

        OK thanks for detailed explanation on why I am wrong.

      • George

        You’re welcome isheep.

    • MR. RIGHT

      What kind of swiss watches are you talking about? Like Rado and Movado?

      • Dhoklastellar Fafda®™

        Yep, mid tier. They will be the first to feel the impact.

  • George

    The apple watch design looks just like the lg g watch, same shit as the pebble. It will never become anything.

    • Rowan09

      Because you said so right?

      • George

        Yep.

    • Dhoklastellar Fafda®™

      You’re right. Just heard that LG too sold 1 mil watches on day 1 & they plant to take Apple to court over the blatant design copy

  • AnArcticMonkey

    “The truth is, sales of traditional watches have already slowed as would-be buyers were holding off purchases in the wake of the Apple Watch’s arrival”

    – that is a pretty big stretch mate, many factors could be at play, and people who buy watches for fashion would not think twice about buying a watch over speculation about an Apple Watch. Two different markets.

  • Tommy Gumbs

    Until Apple realeases sales figures all we have are guesses. And if they did sell a million, the only companies that should be scared at least for now are makers of other smart watches. But overall that sales figure is still not impressive. There are a TON of iOS devices in the wild. 1 million only represents a tiny portion of those owners. Yes, 1 mil outsells the current smart watch market……but it still doesn’t make the smart watch market profitable……at least not yet. I highly doubt any fashion manufacturers are running scared. If anything, they will be quick to react and offer there own version soon….if they are indeed scared.

  • Sigh

    This is pure propaganda and has no factual relation provable to the Apple Watch. Stop spreading fabricated conjecture derived from statement statistics.

  • The Zlatan

    If you were planning on buying a stylish $1500 Swiss watch, you wouldn’t be holding back because of a computer that fits around your wrist..
    Just saying.