blog - iwatch & switzerland: this all happened before
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Part of a series on Smartwatches' possible impact, notably the AppleWatch, on the swiss watch industry. How the the complacency of swiss watchmakers puts the whole swiss watch industry in a bad place.TRANSCRIPT
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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
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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.“
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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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iWatch:
“Switzerland is in
trouble!”
Could a 'Swiss
made' iWatch alone
add 1%point of
Can the iWatch
carry the 'swiss
made' label?
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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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