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LVMH adds 5,000-Swiss franc Hublot to roster of priciest smartwatches
[ZURICH] After TAG Heuer proved there's demand for a luxury smartwatch, parent company LVMH is testing how much consumers will pay for one.
Hublot, another watchmaker owned by the French luxury-goods maker, is introducing its first smartwatch this year, for about 5,000 francs (S$6,920), Jean-Claude Biver, LVMH's watch chief, said in a phone interview. That's more than three times the price of TAG's model and on par with a Rolex Oyster Perpetual. The unveiling will be Wednesday at the Baselworld trade fair.
Apple Inc discontinued a US$17,000 gold version of its watch one year after it went on sale, but that hasn't damped enthusiasm for high-end technology at LVMH. The company makes the world's most expensive smartwatch: a US$200,000 diamond-encrusted version of the TAG Heuer Connected that's limited to five pieces. Hublot is also restricting smartwatch production in hopes that scarcity may justify the price tags.
"It's a unique one-shot," Mr Biver said of Hublot's first smartwatch. "It will be a collector's watch in 20 years." The timepiece will be on sale only this year given that it's linked to the FIFA World Cup soccer tournament, set to take place in Russia in June and July. The watch will alert wearers about which teams are playing and who has scored, and it will reach store shelves in mid-April.
Smartwatches may be a bigger driver of publicity than revenue at LVMH, which features the TAG Heuer Connected in ads and stores worldwide. As Hublot is limiting its smartwatch to 2,018 pieces, that caps the potential revenue from the product at 10 million francs.
That's roughly 2 per cent of the brand's total annual sales, according to estimates by Bank Vontobel AG's Rene Weber.
"It's a marketing gag," the analyst said.
Hublot, known for bulky Big Bang watches with prices in five and six figures, was founded in 1980 and pioneered the use of modern materials such as rubber, carbon fiber and scratch-resistant gold in Swiss timepieces. Mr Biver, known for reviving Blancpain and expanding Omega, became the brand's chief executive officer in 2004.
Having sold Hublot to LVMH in 2008, Mr Biver now also oversees Zenith and TAG Heuer at the Paris-based conglomerate. The 68-year-old executive has spearheaded the Swiss watch industry's push into high technology.
While Rolex and Swatch Group AG remain on the sidelines, TAG Heuer matched the introduction of the Apple Watch in 2015 with its own US$1,500 smartwatch, partly designed by Alphabet Inc's Google and Intel Corp.
Richemont has experimented with smart watchbands at its brands, putting the functions in the strap so that the mechanical watch doesn't become obsolete. However, a smart watchband project at IWC Schaffhausen never saw the light of day, and Montblanc last year switched to a conventional smartwatch, which began at US$890 and is made in China.
When Apple discontinued its US$17,000 high-end version in 2016, Mr Biver told Bloomberg News that it was a sign Apple can't play in the same league as Swiss luxury watchmakers.
Apple's most expensive timepiece now is a version with a leather strap by Hermes International that lists for US$1,399.