Wall Street Journal on trouble in Swiss watch industry

[c41006]

As others have stated, mechanical watches have been obsolete for quite some time now. Watches in general have been really unnecessary for maybe a decade or more because everyone carries a phone around with them that tells the time. Obviously looking at a watch on your wrist is more convenient that pulling your phone out but now we have smart watches that can tell us the time and much more.

I work alongside a lot of young people. Most being in high school or college. A lot of them wear an Apple Watch. The question is how will luxury watch brands convince all these Apple Watch wearers of today to eventually give up all the functions that current smart watches and future smart watches provide and switch to a mechanical time piece that offers much less in terms of functions and features. I guess it depends a lot on how wearable technology progresses.

[AK797]

Originally Posted by c41006

As others have stated, mechanical watches have been obsolete for quite some time now. Watches in general have been really unnecessary for maybe a decade or more because everyone carries a phone around with them that tells the time. Obviously looking at a watch on your wrist is more convenient that pulling your phone out but now we have smart watches that can tell us the time and much more.

I work alongside a lot of young people. Most being in high school or college. A lot of them wear an Apple Watch. The question is how will luxury watch brands convince all these Apple Watch wearers of today to eventually give up all the functions that current smart watches and future smart watches provide and switch to a mechanical time piece that offers much less in terms of functions and features. I guess it depends a lot on how wearable technology progresses.

This is a good point, in future younger people will have been raised on Apple type devices only so in effect they would have to be weaned off them which will be near impossible, and that is how it is different to today's youth where there is still a balance between the two technologies, and some reverence for the artistry and beauty of a mechanical piece.

I suspect in future Watches will be viewed principally as just status symbols and will be put on like jewellery for special occasions rather than worn daily.

[Navarino]

I'm in my mid-late 20s and own multiple Rolex watches and an ALS. I'm also looking to add to my collection...been patiently waiting for the Daytona C for the past ~1.5 years and am considering a few others right while I wait. I've had the bug for a new watch for awhile now and becoming a more active poster on TRF has only exacerbated this "ailment" :-P

I agree to a certain extent that a lot of younger people just aren't interested in luxury watches these days -- you hear all about millennials valuing "experiences" more than material goods and it's true to a certain extent. All-time high levels of student loan debt also must be contributing to the problem to a slight extent. However, plenty of strong income earners around my age aren't spending their money on nice cars, expensive shoes/clothes, etc. but are very serious when it comes to travel and taking vacations overseas. I have a handful of friends who work in the same or similar fields who do exceptionally well for their age when it comes to income. Some of them are into watches like me, some have like a single Sub or GMT mainly for the sake of having a Rolex (i.e., they aren't the "watch guy"), and most are totally content with wearing an Apple Watch due to its functionality.

The biggest issue has already been highlighted. Most young people who develop some interest in a brand like Rolex have a tendency to want a SS sports watch. They want a Sub, a GMT, a Daytona. When they think about dropping ~$10K for the first time on a watch, they aren't doing it for the endless supply of DJs that are readily available. Instead, they experience the frustration of going to an AD and seeing nothing of interest available and maybe call a few stores before giving up. It's a supply issue, pure and simple. I think if more SS sports watches were available, you'd see more young people wearing them. Once they have one and are in the "club" it's only natural for them to start thinking down the road to add to their collection with a PM or actually view something like a DD as a desirable item to work for. Because of where supply is at today though -- things are all backwards...first timers are expected to pay up for these less popular non-Sports items to "earn the privilege" of buying a SS sports watch.

[BillA]

Originally Posted by Carry The Interest

I'm in my mid-late 20s and own multiple Rolex watches and an ALS. I'm also looking to add to my collection...been patiently waiting for the Daytona C for the past ~1.5 years and am considering a few others right while I wait. I've had the bug for a new watch for awhile now and becoming a more active poster on TRF has only exacerbated this "ailment" :-P

I agree to a certain extent that a lot of younger people just aren't interested in luxury watches these days -- you hear all about millennials valuing "experiences" more than material goods and it's true to a certain extent. All-time high levels of student loan debt also must be contributing to the problem to a slight extent. However, plenty of strong income earners around my age aren't spending their money on nice cars, expensive shoes/clothes, etc. but are very serious when it comes to travel and taking vacations overseas. I have a handful of friends who work in the same or similar fields who do exceptionally well for their age when it comes to income. Some of them are into watches like me, some have like a single Sub or GMT mainly for the sake of having a Rolex (i.e., they aren't the "watch guy"), and most are totally content with wearing an Apple Watch due to its functionality.

The biggest issue has already been highlighted. Most young people who develop some interest in a brand like Rolex have a tendency to want a SS sports watch. They want a Sub, a GMT, a Daytona. When they think about dropping ~$10K for the first time on a watch, they aren't doing it for the endless supply of DJs that are readily available. Instead, they experience the frustration of going to an AD and seeing nothing of interest available and maybe call a few stores before giving up. It's a supply issue, pure and simple. I think if more SS sports watches were available, you'd see more young people wearing them. Once they have one and are in the "club" it's only natural for them to start thinking down the road to add to their collection with a PM or actually view something like a DD as a desirable item to work for. Because of where supply is at today though -- things are all backwards...first timers are expected to pay up for these less popular non-Sports items to "earn the privilege" of buying a SS sports watch.

A good post. So perhaps Rolex is shooting themselves in the foot by not delivering more Professional SS watches.

[watchwatcher]

Originally Posted by irish john

say it isnt so

It's not.

[P2725TMB]

Originally Posted by BillA

A good post. So perhaps Rolex is shooting themselves in the foot by not delivering more Professional SS watches.

This is my thought exactly. Whether it will create long term tangible brand harm who knows, but I will be truly amazed if this shortage carries on they don't lose business to rival brands. Whilst some might be prepared to wait a likely lengthy and unknown period, many won't.

[jmrxtr]

in a sushi restaurant 2 weeks ago in calabasas. young kid sporting a Presidential. then another younger guy comes in - sporting a presidential. there will always be a market, just smaller and smaller.

[gullabaa]

My 25 year old son inherited my father's 2007 Rolex Sub 16613 when he passed. From that time, my son wear that watch everyday. I believe that the demand for luxury watch such as Rolex will remain strong. As the millenials ages, they will realize the value of having a good mechanical watch such as Rolex, Patek and Omega.

[Ignace Worang]

From my pov, the interest is also related to the location where one grows up and lives. For example, millenials in Asia are most likely to continue to have big interest in luxury wristwatch while in Europe are less so. I have compared my own daughters and nieces to reach this conclusion��.

[hambone1983]

I don't think there are very many people agonizing over whether to buy an Apple electronic wrist gizmo or a Rolex. In fact, I think it's essentially none. There is virtually no overlap in markets, and nearly none in utility.

The Apple electronic wrist gizmo is purely a commodity; when the new version comes out the value of the obsolete ones rapidly declines. By the time it's 2 releases behind, it is worthless. The materials it is made from reflect this. It is made to be thrown away. Aesthetically, it is ugly AF.

My opinion is that Apple is training young people to have something cool on their wrist. Some percentage of them, when they've gotten too old to be sporting neck beards and blogging down at the local coffee shop, and become more affluent, will graduate to purchasing things of greater sophistication and refinement.

[samson66]

Originally Posted by hambone1983

I don't think there are very many people agonizing over whether to buy an Apple electronic wrist gizmo or a Rolex. In fact, I think it's essentially none. There is virtually no overlap in markets, and nearly none in utility.

The Apple electronic wrist gizmo is purely a commodity; when the new version comes out the value of the obsolete ones rapidly declines. By the time it's 2 releases behind, it is worthless. The materials it is made from reflect this. It is made to be thrown away. Aesthetically, it is ugly AF.

My opinion is that Apple is training young people to have something cool on their wrist. Some percentage of them, when they've gotten too old to be sporting neck beards and blogging down at the local coffee shop, and become more affluent, will graduate to purchasing things of greater sophistication and refinement.

Well said!

An apple watch is a cool electronic gadget that also tells the time. No one buys a Rolex because they need it to know what time it is. If that were the only reason we would all just stick with our cell phones. (Most) men wear exactly two pieces of jewelry - a watch and a wedding ring. And when (most) men reach a certain age they appreciate a beautiful and rugged luxury timepiece on their wrist over an electronic screen that has to be plugged in every night and needs to be replaced every couple of years.

As the above poster stated, very little if any overlap in the two markets. There will always be a place for luxury timepieces and always be a market for electronic gadgets. There is room for both...

[P2725TMB]

Originally Posted by samson66

Well said!

An apple watch is a cool electronic gadget that also tells the time. No one buys a Rolex because they need it to know what time it is. If that were the only reason we would all just stick with our cell phones. (Most) men wear exactly two pieces of jewelry - a watch and a wedding ring. And when (most) men reach a certain age they appreciate a beautiful and rugged luxury timepiece on their wrist over an electronic screen that has to be plugged in every night and needs to be replaced every couple of years.

As the above poster stated, very little if any overlap in the two markets. There will always be a place for luxury timepieces and always be a market for electronic gadgets. There is room for both...

I would add that for me at least its to a large degree the engineering - owning and wearing on display something that's nicely designed and engineered. I fully admit, whilst I do tell the time from my watch rather than phone (or 'device', as its unromantically referred to) I principally wear a watch because of the visual effect and engineering craftsmanship involved.

Personally I wouldn't be seen dead (if I could avoid it!) in a plastic apple watch. No style, no character, no romance.

But I'm old school and it will be interesting to see what happens when the electronically obsessed youth of today grow up. I think it might be surprising and that there will to a degree be a revolt. Whilst so much other stuff in life becomes more and more disposable, it maybe that the watch becomes that one thing that one can depend upon, be proud of and cherish as a long term non-disposable.

[c41006]

Originally Posted by hambone1983

I don't think there are very many people agonizing over whether to buy an Apple electronic wrist gizmo or a Rolex. In fact, I think it's essentially none. There is virtually no overlap in markets, and nearly none in utility.

The Apple electronic wrist gizmo is purely a commodity; when the new version comes out the value of the obsolete ones rapidly declines. By the time it's 2 releases behind, it is worthless. The materials it is made from reflect this. It is made to be thrown away. Aesthetically, it is ugly AF.

My opinion is that Apple is training young people to have something cool on their wrist. Some percentage of them, when they've gotten too old to be sporting neck beards and blogging down at the local coffee shop, and become more affluent, will graduate to purchasing things of greater sophistication and refinement.

I would like to use/wear an Apple Watch but that wrist real estate is currently being taken up by my Rolex. I agree with what you said about Apple training young people to have something on their wrist but if wearable technology continues to improve, it will become harder and harder for people to give it up or ignore it in favor of a mechanical watch.

[dmash]

Originally Posted by c41006

I would like to use/wear an Apple Watch but that wrist real estate is currently being taken up by my Rolex. I agree with what you said about Apple training young people to have something on their wrist but if wearable technology continues to improve, it will become harder and harder for people to give it up or ignore it in favor of a mechanical watch.

Can you elaborate on what you mean by 'ignore it'? What exactly are you giving up by not wearing an Apple watch? I honestly find it a bit ridiculous when somebody says its imperative they have this strapped to their arm. For what, checking your instagram within milliseconds instead of seconds by pulling your phone out of your pocket? Perhaps .01% of the population could benefit from them, but I'd love to hear your opinion.

[tyler1980]

Originally Posted by dmash

Can you elaborate on what you mean by 'ignore it'? What exactly are you giving up by not wearing an Apple watch? I honestly find it a bit ridiculous when somebody says its imperative they have this strapped to their arm. For what, checking your instagram within milliseconds instead of seconds by pulling your phone out of your pocket? Perhaps .01% of the population could benefit from them, but I'd love to hear your opinion.

the health tracking benefits are hard to ignore. IMO in the future it could almost be a medical device linked to your medical records/doctor or even alerting you when there is a potential problem so you don't die and possibly proactively alerting emergency services. Its not that far fetched.

Its this generation's version of " ive fallen and i can't get up" from life alert

[dmash]

Originally Posted by tyler1980

the health tracking benefits are hard to ignore. IMO in the future it could almost be a medical device linked to your medical records/doctor or even alerting you when there is a potential problem so you don't die and possibly proactively alerting emergency services. Its not that far fetched.

I think these 'health tracking benefits' are completely over the top. When you're training, ok, fair enough. But 24 hours a day? Borderline paranoia. You don't need to know your blood pressure and heart rate every few minutes unless you're monitoring a serious health condition, for which devices already exist.

I'd never want to be that 'plugged in' anyways. That's the equivalent (to me), of wearing a Life Alert monitor around the clock. Completely unnecessary unless you're far long in life or have serious health issues. Not to mention, it creates anxiety when one is aware of said measurements on a more frequent basis.


EDIT: HAHA You and I are quite often on the same page with our logic. I just saw you edited with the Life Alert! Haha, good stuff!

[c41006]

Originally Posted by dmash

Can you elaborate on what you mean by 'ignore it'? What exactly are you giving up by not wearing an Apple watch? I honestly find it a bit ridiculous when somebody says its imperative they have this strapped to their arm. For what, checking your instagram within milliseconds instead of seconds by pulling your phone out of your pocket? Perhaps .01% of the population could benefit from them, but I'd love to hear your opinion.

Well let me start by saying that I am a relatively young adult (28) and I have been interested in Rolex watches since I was very young. My father has worn a Day-Date 24/7 365 since I came into this world and I was mesmerized by it when I was little and as I grew older I knew that I wanted a Rolex on my wrist. Because of my fondness and appreciation for Rolex watches I am much more resistant to something like an apple watch than the "average" young adult. I'm also not a tech guy. I don't go around chasing all of the latest tech gear and i've been using the same iPhone for the past 2.5 years.

With that being said there are things about an apple watch that appeal to me and it is much more than just checking instagram. Having many of the functions of your iPhone available right there on your wrist just a glance away at any moment seems pretty convenient. It's not a necessity thing but a convenience thing. Who knows, maybe they are rubbish but I don't know because I've never owned one.

My point is that there are tons of young people out there that are already wearing apple watches and other smart watches on a daily basis and they like them and they see them as worth having strapped to their arm. It will be extremely difficult to convince these people to give that up for an old school mechanical timepiece. You also have to keep in mind that wearable technology is still in its infant stages and if it continues to get better and better, it would make it even more difficult to convert people over to mechanical watches and it could start converting more and more people away from mechanical watches to smart watches.

[dmash]

Originally Posted by c41006

Well let me start by saying that I am a relatively young adult (28) and I have been interested in Rolex watches since I was very young. My father has worn a Day-Date 24/7 365 since I came into this world and I was mesmerized by it when I was little and as I grew older I knew that I wanted a Rolex on my wrist. Because of my fondness and appreciation for Rolex watches I am much more resistant to something like an apple watch than the "average" young adult. I'm also not a tech guy. I don't go around chasing all of the latest tech gear and i've been using the same iPhone for the past 2.5 years.

With that being said there are things about an apple watch that appeal to me and it is much more than just checking instagram. Having many of the functions of your iPhone available right there on your wrist just a glance away at any moment seems pretty convenient. It's not a necessity thing but a convenience thing. Who knows, maybe they are rubbish but I don't know because I've never owned one.

My point is that there are tons of young people out there that are already wearing apple watches and other smart watches on a daily basis and they like them and they see them as worth having strapped to their arm. It will be extremely difficult to convince these people to give that up for an old school mechanical timepiece. You also have to keep in mind that wearable technology is still in its infant stages and if it continues to get better and better, it would make it even more difficult to convert people over to mechanical watches and it could start converting more and more people away from mechanical watches to smart watches.

I'm the exact same age as you, haha. So I'm not speaking to you with a generational gap, I understand you.

My point is not to counter by saying 'nice watch or apple watch', these are the only choices. My counter is that people just aren't going to wear a watch. I think all these Apple watches are incredible gimmicks. Most people I know, also feel the exact same way and consider it kind of laughable and the pinnacle of appleboy fandom. Hate to say it, but I almost sort of judge a person wearing an Apple watch from the get go.

[Onikage]

I really don't see too many Apple watches. I'm sure many have them but leave them in the drawer. I know a few that bought them but don't seem to wear them. I see a few of those slim rubber fitness strap thingies.. whatever they do for people.

[pam66]

what i like about high-end watches is that buying them means investing in highly trained human beings, the watchmakers. this argument applies surely to PP and (maybe to a lesser extent) to rolex as well.

[powerfunk]

The Swiss watch industry will be just fine. Neither Apple nor Rolex release sales numbers for their watches; the "Apple Watch threatens the watch industry" schtick seems to just be conventional wisdom that can't stop being lazily repeated.

I know plenty of wealthy college students with luxury watches. Plenty of people are into watches, and the ones who are into them, tend to get really into them. It's just a different landscape from the olden days, when everyone needed 1 watch. Now, nobody needs a watch, but the people that buy them are often psychopaths like us who might buy 20 luxury watches in a lifetime.

The article talks about how many unsold pieces the industry is buying back, but if you make a hot watch, it will sell. There are tons of ugly models from Swiss brands that are absolute garbage, and everyone just has to step their design game up. And consumers as a whole expect more interesting dials than they used to.

[TurboDiesel]

Looks like a quartz era repeat but with smart watches... rolex will pull through, this might be the end for the other big names

[jstan9]

Originally Posted by TurboDiesel

Looks like a quartz era repeat but with smart watches... rolex will pull through, this might be the end for the other big names

I hope you’re right. They did do it before. I think the point from the posters who’ve talked about wearable men’s jewelry may be the ‘luxury’ strategy they’re pursuing.

Like many here, I love the look and derive great pleasure from wearing a miniature machine work of art.

[jfoord27]

I was recently talking about Rolex watches to a client (ASX 300 CEO) and he said I knew "far more about Rolex than I should at my age".

He was implying that surely I'm still too young to be able to join the Rolex club. I'm 32.