New Apple watch could take bite out of Swiss market

[ZURICH] The Swiss watch industry faces an increased threat from a new Apple Watch able to detect heart problems that is likely to appeal to older shoppers, industry experts said on Thursday.

Apple Inc presented the new Apple Watch Series 4 able to take an electrocardiogram to detect an irregular heartbeat and start an emergency call automatically if it detects a user falling down.

"Far from just being an evolution, the new Apple Watch 4 is probably a revolution because it does not only target the wrists of geeks, but also of people over 45 who care about their health," industry expert Gregory Pons said on his watch website businessmontres.com.

Apple has rapidly gained share in the watch market, with connected technology research firm CCS Insight estimating that the tech giant will come close this year to matching worldwide sales of Swiss-made watches, which had shipments of 24 million units in 2017.

Exports of Swiss watches in the entry-price segment - a retail price of up to around US$500 - have steadily declined over the past years, with competition from smartwatches one of the factors responsible.

Brands in that price range include Swatch Group's Swatch and Tissot, the Mondaine brand and fashion watches made by US watchmaker Fossil.

"The Apple Watch continues to improve and provide additional relevant functions. I think this will represent a harder and harder challenge to entry-price Swiss-made watches, which are not in a position to stay relevant," Exane BNP Paribas analyst Luca Solca said.

The Apple Watch Series 4 is priced from US$399.

The head of LVMH's watch division, which makes watches under the Zenith, Hublot and TAG-Heuer brands, Jean-Claude Biver thought the Apple Watch did not pose a threat to Swiss watches above a certain price point.

People getting into watches thanks to an Apple product were more likely to buy a Swiss timepiece later on, he said in emailed comments.

Shares in Richemont were up 0.2 per cent at 1315 GMT, while those of peer Swatch Group, which is more exposed to the entry-price segment, were down 0.6 per cent.

Shares of fitness device rival Fitbit Inc fell 6.9 per cent after the Series 4 announcement on Wednesday.

REUTERS