Shortly before the wraps came off the Apple Watch in 2014, the company’s design guru Jony Ive had reportedly been excitedly telling his team the new device would pose real problems for the venerable Swiss watch industry. In contrast, soon after the smartwatch was announced, TAG Heuer boss Jean-Claude Biver confidently proclaimed that Apple’s wrist-based effort “wouldn’t create another crisis for the Swiss watch industry.”
So who, looking at the current market, called it right? According to Strategy Analytics, it seems Mr. Ive may have shown the better judgment.
The research firm says its figures show global smartwatch shipments reached 8.1 million units in the final three months of 2015, compared with 7.9 million Swiss watch shipments. This marks the first time ever for smartwatches to outship Swiss watches on a global basis.
What’s more, the year-on-year increase is striking, with only 1.9 million smartwatches shipped during the same period in 2014. The Apple Watch launched in April 2015.
Sure, there are plenty of smartwatches out there built by companies other than Apple, but Strategy Analytics suggests the Cupertino company’s offering has been the driving force behind the market’s shake-up.
The research firm says smartwatch ownership is growing “rapidly” in North America, Western Europe, and Asia, with Apple’s device capturing a 63 percent share of the global smartwatch market in the last quarter of 2015. Samsung followed with 16 percent, while together the two tech companies accounted for an impressive 80 percent of all smartwatches shipped worldwide, the data indicated.
Noting that Tag Heuer accounted for just 1 percent of all smartwatches shipped globally in 2015’s fourth quarter (though to be fair, its sole offering wasn’t available for the entire quarter), Neil Mawston, executive director of Strategy Analytics, said the Swiss watch industry has been “very slow to react….sticking its head in the sand and hoping smartwatches will go away.”
Judging by these latest stats, that clearly isn’t going to happen.
While 2014 was a record year for the Swiss watch industry with sales reaching $23.9 billion, revenue from exports has been falling sharply over the last 12 months, causing increasing concern for affected manufacturers.
Depressed demand for wristwear in some Asian markets certainly hasn’t helped, but the apparent unwillingness to jump into the smartwatch market early on has left many Swiss watchmakers playing catch-up.
The Swiss watch industry is gradually getting its act together, and with the right products has a decent chance of upping its market share over time. Swatch, for example, beat Apple to mobile watch payments in China with a device it launched in October, while Movado and Tag Heuer have also recently entered the fiercely competitive space.