Silke Koltrowitz, reporting for Reuters:
TAG Heuer is pushing ahead with plans for a smartwatch to more directly compete with the likes of the Apple Watch and may make acquisitions to help drive the strategy, its head said on Tuesday.
Swiss watch makers like TAG Heuer, the biggest brand in luxury goods group LVMH’s watch portfolio, had until recently largely dismissed the threat of “smart” gadgets, but LVMH watch chief Jean-Claude Biver says he had changed his mind on the subject.
Biver, who had already outlined plans for a smartwatch, said he had struck several partnerships and was mulling purchases to help come up with an original upmarket offering.
TAG Heuer’s smartwatch won’t sell. There’s no market for it.
Apple Watch requires pairing with an iPhone, and TAG’s smartwatch will need to pair with a smartphone to even have a chance of being as feature-rich as Apple Watch.
Apple isn’t going to re-engineer iOS for TAG’s benefit, so TAG’s smartwatch won’t pair with an iPhone the way Apple Watch does.
In order to have even a chance of being as feature-rich as Apple Watch, then, TAG’s smartwatch will have to pair with an Android phone. However, TAG wearers aren’t Android users. Rich people buy TAG watches, but rich people don’t buy Android phones.
This is TAG’s dilemma. Its smartwatch will need to pair with an Android phone to be anywhere near as feature-rich as Apple Watch, but TAG wearers don’t buy Android phones.
Ultimately, this dynamic is representative of the entire luxury watch industry. Replace TAG with Rolex, Omega, Longines, or any other high-end watchmaker, and the problem is the exact same.
A Rolex smartwatch would need to pair with an Android phone to be anywhere near as feature-rich as Apple Watch, but Rolex wearers don’t buy Android phones. An Omega smartwatch would need to pair with an Android phone to be anywhere near as feature-rich as Apple Watch, but Omega wearers don’t buy Android phones. A Longines smartwatch would need to pair with an Android phone to be anywhere near as feature-rich as Apple Watch, but Longines wearers don’t buy Android phones. None of their smartwatches would sell. There’s not a rich-people-who-use-Android-and-buy-luxury-watches market.
Over the next decade — as Apple Watch’s “computer on a chip” becomes more powerful, as voice input becomes more useful, as Apple executes more of its health and smart home plans, as people recognize Apple Watch’s convenience — almost all watches will become smartwatches, similar to how all cell phones are becoming smartphones. The luxury watchmakers who make smartwatches will fail, because there won’t be a market for their products. But the luxury watchmakers who don’t make smartwatches will see their market continuously shrink. They’re damned if they do and damned if they don’t.
This, I believe, is why Jony Ive said, “Switzerland is fucked”.