THE DISRUPTION OF SMARTWATCHES

The history of smartwatches is not new, many brands have been trying since years to come up with a wearable smartwatch on the wrist, the watches we see today is an ongoing effort of years by different brands, trying to make the wearable more functional and beyond telling time. In 1982 Seiko make the bold move of launching the T.V watch, the watch also had an FM radio, quartz chronograph and would cost $495. In 1994 Timex introduced its computer watch “Data Link, which was retailed at $130, this watch was developed in partnership with Microsoft. In 1998 Seiko launched the Ruputer Watch, which Seiko called “the world’s first wearable personal computer.” In 2003 Bill Gates partnered with Citizen, Fossil, Swatch & Sunnto, the watch was called smartwatch, “that delivered news, weather, sports scores, stock quotes, text messages, horoscopes, and moreover a wireless, FM radio frequency network that Microsoft created.” “HODINKEE. 2018. Four Revolutions: Part 4” The watch turned out to be a total failure.

In 2011Motorola launched “ MotoACTV” a watch powered by 600MHz processor with GPS blue tooth and radio, which was capable of tracking running. In 2012 Metawatch Strata launched the second generation of the smartwatch with Bluetooth connectivity and displayed notifications from the phone. In 2012 the Italian brand “I’m Watch an android based smartwatch was launched. Again in 2012 SONY launched a smartwatch with touch screen OLED. “GSMArena.com. 2018. A brief look at the history of smartwatches”

In 2012, Eric Migicovsky, approached the fund-raising platform “Kickstarter”, Eric had a new idea of making entry into much-failed smartwatch business, however, he could not raise enough money for his idea and approached Kickstarter, hoping to raise $100,000. So, in April 2012 Pebble the new concept of telling time was on Kickstarter and made news by raising $10 million, “a smartwatch was born”. PCMag. 2018. A Look Back at Pebble's Rise and Fall . 

With an order of 85,000 watches, Pebble was a hit and would be called the first-ever successful smartwatch. The second round of funding brought in $20 million and an order of another 100,000 watches. It’s estimated that Pebble sold in a total of 3 million smartwatches in three years. Notably, the first Pebble watches were delivered in 2013. However, at this point with the development of smartphones, many entrants were getting into the smartwatch segment, namely Samsung & Sony, which launched their version of smartwatches in 2013. Apple announced its entry into smartwatches in 2015. This started the decline of Pebble watch which could not cope up with facing the big brand in direct competition.

“According to TechCrunch, Citizen made an offer of over $700 million for the firm in 2015, and another was made by Intel this year for $70 million. Now Fitbit has bought the brand for $40 million, which the same source said was just about covering debts.” ( TechRadar. 2018. Pebble: a smartwatch ahead of its Time | TechRadar.)

The closure of Pebble didn’t come as surprise as Apple had already announced its smartwatch and it was highly anticipated, and Apple sold 11.6 million watches in the first nine months of its launch. Just in the last quarter of 2017, Apple sold 8 million watches, becoming the biggest watchmaker in the world. ( Business Insider. 2018. Apple outsold the entire Swiss watch industry in 2017)

The Apple smartwatches have changed the way people see fitness and health, as per the research of Statista in which the question was asked “What are the most important smartwatch applications for you?” to which the response was 34% fitness, 30% communication, and 28% health. Suddenly, a new use of watch was discovered, time-telling was not a priority anymore, anyway, the time comes free with the phone. The smartwatch has become a health gadget. The global smartwatch unit sales have gone from 5 million units in 2014 to an estimated 141 million in 2018. As per the report of Statista, “Market share of smartwatch unit shipments worldwide by vendor from 2Q'15 to 4Q'17” Apple holds 60.99% market share followed by 8.4% with Samsung and 7.25% with Garmin. The growth within the smartwatches category has been exponential and is expected to grow, this has definitely dented the entry layer Swiss brands from price range of $200 and $1000 the luxury Swiss watch brands so far are not affected with the rise of smartwatches, as the luxury watches are being sold on the basis of its history, workmanship, tradition and mechanical accuracy. 

“Another casualty, as noted earlier, was Fossil. Apple had hurt sales in the mid-range of the U.S. watch market, particularly the fashion-watch segment, where Fossil is the leader. (Also hurting that category is its department store distribution.) One measure of Apple’s impact on Fossil’s business is the stock price. On the day Apple Watch debuted in April 2015, Fossil’s stock traded at $83.75. Yesterday, it closed at $7.75.” ( HODINKEE. 2018. Four Revolutions: Part 4: A Concise History Of The Smartwatch.)

The slew of smartwatches continued with Motorola Moto 360in 2014, LG launched G watch R in 2014, Samsung also joined the crowded market space of smartwatches and currently holds 11.4% market share and Apple holds 55%.

Apple has officially become the biggest watchmaker in the world and it’s not Swiss, all this happened in four years of the launch of Apple Watch, the smartwatch has taken the fancy of the Swiss watch industry, which post quartz crisis have learned to adapt better with the changing times. The traditional Swiss watch brands have realized that mechanical watches are here to stay for a long time and Swiss watchmaking industry will become more and more niche, especially the luxury brands which will give its clients the taste of classical watchmaking which is free of any digital gadgets, the time telling in mechanical watches is still ages-old mechanism-based which runs on a wheel, balance spring, winding rotor and unlike a smartwatch can last generations.