Industry News, June 2016

A Year Later…

Smartwatches Now Outsell Swiss Watches

By Aaron Recksiek, CW21

Last June, we covered all the relevant and emerging smartwatches for 2015. It was a big year for smartwatches and was seen as the tipping point for market integration of the wearable technology. In February, the research firm Strategy Analytics reported that smartwatch sales in the fourth quarter of 2015 topped 8.1 million units. Swiss watch sales in that same period only reached 7.9 million units. This marked the first time in history that smartwatches outsold Swiss watches. Apple is given the most credit for this milestone, since they sold 12 million Apple Watches alone in 2015 and currently occupy 63% of the smartwatch market.
     Many observers might see this as consumers replacing their luxury watches with a smartwatch. However, when you look at the numbers, Swiss watch sales only declined by an annual rate of 5% over the fourth quarter, while smartwatch sales rose 316% over the same period. So while there are some consumers opting for a smartwatch purchase instead of a luxury Swiss watch, the disparity of the numbers translates to a whole new market being opened up to watch companies. Look at it this way, a year ago someone who may have never worn a watch before, like most millennials, is now starting to wear a timekeeping device on valuable real estate—their wrist. Sure, it may do more than just tell the time, but it is introducing a whole new customer base to strapping something onto their wrists every morning, and being comfortable with that.
     The future is bright for smartwatches as projections for sales are predicted to more than double over the next two years. So far, the previous forecasts have been fairly accurate, so get used to watching more and more people poke at their small watch displays with their fingertips as their smartphones remain comfortably in their pocket.  

Sources
www.wareable.com
www.forbes.com

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Aaron Recksiek is an independent watchmaker in Salt Lake City, Utah. He is a graduate of the 2008 WOSTEP class at the Lititz Watch Technicum.