What it is: Sales of Apple’s Watch are starting to hurt sales of traditional Swiss watches.
Anyone remember back in the early days of mobile phones when Palm’s CEO Ed Collegian said, “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
Palm is no longer around after once dominating the smartphone market with their Treo phones, yet Apple did walk into the smartphone market in 2007 with the iPhone and decimated every smartphone manufacturer out there.
Back then, nobody thought the iPhone would sell very well. Microsoft’s CEO, Steve Ballmer, even laughed at the iPhone, claiming Windows CE would have a larger market share than the iPhone ever would. Now the iPhone makes more money than all of Microsoft’s products combined.
So back when Apple introduced the Apple Watch, you would think traditional watch makers would see the future and respond accordingly. Instead, Swiss watch makers dismissed the Apple Watch as a gadget and a fad. Now they’re learning that sales of Swiss watches are dropping and sales of the Apple Watch are climbing.
What’s the advantage of a traditional Swiss watch? Other than its luxury status as a piece of jewelry, not much. What’s the advantage of an Apple Watch? You can buy a luxury version to show off as a piece of jewelry, but it can also let you take phone calls, send out messages, show you the weather, display stock quotes, and monitor your health activities.
Given the choice between a product limited to one feature or another product that offers multiple features, why would anyone choose the more limited product? That’s exactly what consumers are asking themselves as Swiss watch sales slowly nosedive into the ground, never to return to their former highs ever again for the rest of eternity.
Beyond nostalgia, why would anyone want a mechanical Swiss watch? It can’t even tell time as accurately as an Apple Watch. For Swiss watch makers to cling to their traditional past as a luxury item is like horse and buggy manufacturers clinging to their traditional past as the main transportation method. Clinging to the past simple doesn’t work, which smartphone manufacturers learned long ago when the iPhone changed the world.
Now the Apple Watch is quietly changing the world even though so many critics continue claiming it’s a flop. Yet it’s hard to imagine a product is a flop when it’s selling well with increasing sales over time, and wiping out the traditional market at the same time.
The Apple Watch is simply going to define the wearable computer market just like the iPhone defined the smartphone market and the iPad defined the tablet market. For Swiss watch makers to ignore this is simply willful ignorance that will only hurt them in the long run.