By John Revill
ZURICH--What does Switzerland's fabled watch industry make of
the Apple Watch? Not much.
"It looks a little cold, and lacks, for my taste, a bit of
personality," said Jean-Claude Biver, a legendary figure among
Swiss watchmakers who led the revival of Switzerland's Blancpain
brand in the 1980s before stints at Omega and Hublot.
Mr. Biver, who now serves as president of French luxury group
LVMH Möet Hennessy Louis Vuitton SA's watch business, delivered a
succinct verdict on Apple's entrant: "This won't create another
crisis for the Swiss watch industry."
Watch manufacturers and retailers in the Alpine country have
been enjoying a remarkable boom in recent years, as sales of
timepieces with price tags running to tens of thousands of dollars
have surged. The industry has reported rising exports in recent
years, collectively reaching 21.8 billion Swiss francs ($23.3
billion) in 2013.
Still, the Apple Watch, which has been forecast to sell up to 30
million units in its first year of availability, has promised the
biggest upheaval the Swiss industry has faced since competition
from cheaper Japanese quartz watches brought it to its knees in the
1970s.
Apple's smartwatch, unveiled to much fanfare earlier this week,
comes in two sizes and three versions, and will go on sale next
year with a price tag of $349--around the entry level for many
Swiss watches. Apple's powerful brand, tech know-how and size make
it a formidable competitor, and the company is attempting to appeal
to customers' sense of style with an array of colors and materials
including 18-karat gold. The device has spawned a great deal of
online fawning.
Not so much among Switzerland's cognoscenti.
"From the design point of view you cannot say it's a watch, more
an iPhone for the wrist," said Alain Spinedi, chief executive of
privately-owned Montres Louis Erard SA, referring to Apple's
popular mobile phone. "People may travel with it, but it won't
replace the watch you wear to a party."
Nick Hayek, chief executive of Biel-based Swatch Group AG, the
world's biggest watchmaker by revenue, said smartwatches like
Apple's are an opportunity. "Everything that makes millions of
people more open to put something on their wrist will boost the
opportunities to sell more watches," said Mr. Hayek.
But experts reckon Swatch could be one of the companies most
vulnerable to the Apple Watch. Roughly 15% of Swatch's annual sales
come from watches that sell for less than about 500 Swiss francs,
according to estimates by Luca Solca, an analyst at Exane BNP
Paribas. Mr. Solca thinks smartwatches including Apple's version
could reduce Swatch brand sales by 10% and sales of the Swatch
Tissot brand by 5%, in both 2015 and 2016.
Swiss watch insiders don't think the Apple Watch will have the
same sort of destructive effect on their industry that the iPhone
had on mobile phone makers. They say that's because there will
always be demand for the sort of handcrafted, old world touches
that come with a pricey Swiss watch.
"People want special workmanship, lovely dials, all handcrafted,
they want something that is unique to them," said Paul Herzog, who
manages the Van Cleef & Arpels boutique on Zurich's exclusive
Bahnhofstrasse, which sells watches that cost between 6,000 and
250,000 Swiss francs. Apple's new entrant therefore won't bring any
big change to one of Switzerland's mainstay industries, said Mr.
Herzog.
Mr. Biver, of LVMH, said the best Swiss watches have personality
that Apple's watch lacks, and compared them to one of America's
biggest supermodels of days past.
"It is like Cindy Crawford with her mole," said Mr. Biver. "That
is part of her character and has become a sign of recognition. As
soon as you see it, you know who it is."
Write to John Revill at john.revill@wsj.com
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