blog - iwatch & switzerland: this all happened before

11/11/2014 iWatch & Switzerland: This all happened before | Transformation Hydraulics

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Transformation Hydraulics

THOUGHTS ON BUSINESS STRATEGY, AND HOW TO MAKE ITWORK. BY NICOLAS SCHOBINGER.

So, finally, Apple’s longawaited iWatch was unveiled last week. Andsurprisingly, there is a remarkable LACK of strategic response comingfrom Swiss watchmakers in its wake.Perhaps Apple Design Chief Jonathan Ive is right when he predicted,“Switzerland is in trouble”.

This all happened before. The iPhone took down whole industries(pointandshoot cameras) and market leaders (Nokia, Blackberry).

So, what exactly WERE the reactions to Apple’s new announcement?Some Swiss watchmakers said they are only “a bit disappointed” whileothers dismiss the iWatch as not revolutionary. Still others have goneas far to proclaim the whole category will flop.

However, a few industry observers seem to be rather impressed. Hereis Benjamin Clymer from respected watch magazine Hodinkee;

iWatch & Switzerland: This all

happened before

2

Apple got more details right on their watch thanthe vast majority of Swiss and Asian brands do with similarly

Sep

18



Clymer goes on to write that the iWatch will likely hurt the lower

priced segment of Switzerland and Asia’s watch market. Apparently

global investors agree as SwatchGroup has lost nearly 5 percent of its

market value in just one week.

What lessons will Switzerland draw from this? What can Swiss

watchmakers do to stay relevant – even if it is only the lowerend of

the watch market? Here are some options:

1. Compete on Product2. Get big into the iWatch Ecosystem (apps, accessories like

straps, underlying technologies)

3. Become a Partner in building the iWatch (manufacturecomponents, assemble, quality assure)

My favorite is number 3 (see what I wrote here), but it fully depends

on Apple. The ecosystem can be a source of massive value for other

brands – think iWatch accessories like straps or apps like for Nike+.

Competing against the product will likely be the most difficult and

risky. Why?

The iWatch makes a statement, it displays information, enables

transactions/identification, and connects as a node in the Internet. I

think Switzerland will – on lowerpriced segments – only be able to

compete on a few of these, not on all.

Statement: Switzerland can compete. Swiss watches are astatement by themselves. Very emotional. Apple seems to have

gotten a lot right, but I believe this one is the home turf of Swiss

watchmaking. This should be a defendable area with limited

effort (ie introduce more personalisation).

Displaying: Switzerland can compete. It will require tocompletely rethink the dial without making Swiss watches losetheir identity.

Sensing: Switzerland can compete. Even for sophisticatedsensing capabilities, competition is possible. This is especially

valid if the sensors do not need realtime complex connectivity.

Transacting: Switzerland can compete only forniches. Everything will have to fight with ApplePay and other

identification implementations. They will make the iWatch

‘sticky’ on your arm. Big transaction services, further need the

ability to cut massive global deals and provide the necessary

infrastructure. This is a nogo for Swiss watchmakers; they are

too small and too new to this. But niches might be still

addressable. Notably if they do not need tethering and can

priced watches, and those details add up to a really impressive

piece of design.“



function offline. Successful examples exist like Access from

Swatch and Amvox from JaegerLeCoultre which opens your

Aston Martin.

Connecting: Switzerland is unlikely to compete in the shortterm. You need the ability to either connect directly to the

Internet (unlikely due to battery life) or to tether to a device

with these capabilities. The latter is fully depended on

whether Apple or Google will allow other smartwatches to

connect to iOS or Android.

Summarising, the sweet spot for a Swiss product response to theiWatch is what I like to call: an augmented watch. It will look like aSwiss watch, deliver additional information and can be used for

selected identification working offline (ie would not need to be

tethered). Further, it would need to be upgradable to be able to keep

pace with competition, and highly personaliseable visually (size, form,

color, materials, straps).

The Swiss Watch industry has plenty of talented executives on their

payroll. We would all love to hear about their ideas how to deal with

the iWatch. My feeling tells me it can’t be just the relaxed answersgiven recently. They will have to take the iWatch more seriously thanthey do now.

Copyright 2014 Nicolas Schobinger. All Rights Reserved.

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2 THOUGHTS ON “IWATCH & SWITZERLAND: THIS ALL HAPPENED BEFORE”

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Posted in Smart Watches, Transformation

Tagged Apple Watch, swiss made

Edit

GDP toSwitzerland?

In "SmartWatches"

In "SmartWatches"

In "SmartWatches"

STEVEN— SEPTEMBER 28, 2014 AT 05:25 Edit

“Apple Watch,” not “iWatch.”

Reply

Nicolas Schobinger— SEPTEMBER 20, 2014 AT 21:06 Edit

Today I looked into Apple Watch Edition – the luxury version of theiWatch. Pricing is yet to be announced. I am wondering if Apples isgoing to position this so it eats into eg Brands like Omega or evenRolex.

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