Apple watch vs. Swiss mid-price segment watches in Q4 2019: a disturbing correlation!

Difficult not see a correlation between the Q4 sales increase in units of the new Apple watch +18% and the equivalent and opposite decrease of the Swiss mid-segment price (CHF200-500) in key selling month of December 2018: -18.3%

Of course, we need to compare apple to apple (!) as some would argue that we speak about a full quarter for Apple while only about December for the Swiss export. Ok, but… December was particularly down for the Swiss exports, which means that sell-in at distributors level did not happen. Couldn’t it be indeed based on the fact that sell-out didn’t happen either at the retailers’ level in Q4?

As well, some people may argue that the average retail price of the Apple Watch is about half of the mid segment (200-500 ex-factory corresponds to a retail price of about 600-1500). But hey… we are speaking about 9.2 million Apple watches out of which the novelties with cellular would cost between 550$ to 800$. So yes, it does touch that price segment !

And I have another bad news for the Swiss watch industry, something that few people have commented so far. Yes the new health functions of model 4 are revolutionary. It can indeed save your life, but the feature that makes your everyday life better is the embedded cellular function. It allows you to go around with your watch without your mobile phone and still get your calls and messages. Now this e-sim card requires the mobile operator to have the latest capabilities and so far, only 18 countries offer this cool option, and not every operator has it in those countries (i.e Salt in Switzerland doesn’t offer it). What does it mean? That the coolest feature of the Apple watch is still under traded. Operators seeing their revenues flattening, are heavily betting on those devices to seek grow. So as the best of the Apple watch is still to come, the worse for the Swiss watch industry too !