How the Apple Watch Will Affect the 2015 Consumer Market
In days past, fewer watches spoke luxury, quality and design like Swiss-made watch brands. Tissot, Montblanc and TAG Heuer have dominated the niche in this industry for quite awhile. According to the Financial Post, Switzerland has produced over half the world’s watches in value while only making a small fraction of watches in quantity. However, this trend was interrupted in the 1970s and 1980s as Japanese brands like Seiko introduced battery-powered quartz watches, which provided for more accuracy. Analysts attributed the estimated 60,000 job losses in Switzerland during this time period to their underestimating the demand for the newer Japanese models. While they made a recovery with the unveiling of the plastic-based Swatch, some experts are predicting that Switzerland is dangerously close to repeating the same mistake as many in the Swiss watch industry are referring to the smartwatch as a mere gadget.
Apple Watch Threatens to Dominate the Swiss Market
Just as iTunes has driven consumers away from CDs, it is highly probable that the Apple Watch will challenge the $38 billion watch industry in Switzerland, according to Elmar Mock, one of the frontrunners who helped develop the Swatch in the 1980s. He estimates that the Apple Watch will reach sales of 20 to 30 million units annually in only its first few years.
Apple Watch Overlaps Several Features That Will Impact Similar Devices
CNET analysts estimate that because the Apple Watch combines wristbands, other fitness monitoring devices and a smartwatch, it could cause a dip in similar industries, such as Jawbone Up and heart rate monitor chest straps. They estimate that half of consumers who would have purchased a fitness wristband will instead purchase a smartwatch. Angela McIntyre, analyst for Gartner predicts, "Companies will ship 40 million smartwatches in 2015, quadruple the number expected this year. Apple Watch has the potential to make up as much as half of the shipment volume next year."
First Three Apple Watch Designs Seem Promising
Apple announced plans for its smartwatch line more than a quarter in advance, creating the advantage of showing off its first few design options. This includes its stainless-steel cased Apple Watch, the 18-karat-gold-cased Apple Watch Edition and an aluminum-cased Apple Watch Sport. Apple has done a remarkable job at offering extreme versatility; instead of only catering to consumers who prefer a lower price point, they are also tackling more of the luxury watch sector. The 18-karat gold watch is set at a $10,000 and up price point. According to Forbes, while this strategy might pay off, it is more likely that the cheaper versions will be the ones we see truly disrupting the marketplace this year. After all, it’s hard to imagine who would want to purchase such an expensive watch for a sweaty workout routine.
While it is highly probable that Apple will dominate the niche in 2015, it is possible that other wearable technology companies could make a rebound in 2016, as lower-cost models and more design options become available to consumers. We’ve seen this supply and demand trend before in the technology arena, as rivals like Samsung, LG and Motorola have vigorously competed with the iPhone.