Are you still wearing a watch?


 

A couple of years ago everybody was wearing a watch, nowadays we see more people wearing a smart watch instead. The degree to which consumers know what is available in the marketplace, including the precise attributes of different product and service offerings, has changed consumer behavior. Some consumers make their product choices based on an assessment of what product offers them the best fit and with all the current technologies consumers expect more practical functionality in their purchases. While smart watches provide features such as a camera, accelerometer, thermometer, GPS navigation, map display, SD cards and so on, it can also communicate with several other gadgets. With all these functionalities people can wonder ‘Why still wear a watch instead of a smart watch?’.

Each year Deloitte presents a Deloitte Watch Industry Study, a study based on an online survey, discussions with executives and a consumer survey which was conducted among people in China, France, Italy, Japan, Switzerland and the US. The fourth annual Deloitte Watch Industry Study revealed the following key findings:

  • Average price of exported Swiss watches peaked at CHF 730;
  • Pessimism hits four-year high;
  • External risks are back;
  • Smart watches taken more seriously;
  • Significant consumer interest in smart watches in China, Italy and France;
  • The rise of digital media.

In this blog I want to highlight the fourth key finding of this study. With the release of the Apple Watch in April 2015 a new era of the smart watches industry was arrived. Even though the Apple Watch is not revolutionizing in the genre of the smart watches it does have a special feature in contrast to other smart watches, the Apple Watch is positioned as a fashion accessory. The Apple Watch Hermès for example is equipped with high-end leather bands and a dedicated Hermès dial. This watch is sold in Apple and Hermès stores which confirms the positioning. But the major competitors like Motorola, Samsung, LG and Sony would be a fool if they did not react on this positioning. Therefore they have all individually started to take action. New models have been produced with more upmarket finishes, and features that are closer to traditional watches, for example by adopting a round form factor. These companies have also anticipated by producing different kind of versions, with the underlying idea that everyone should be able to find a smart watch of their taste. You can think of sport, luxury, man and woman versions, they are all available on the market. In my opinion in spite of all these new products, the market of smart watches is young and companies with traditional watches still have a window of opportunity to develop their own alternatives. For example I prefer an elegant watch, and personally do not see the added value of a smart watch next to a smartphone. Within the watch industry, the smart watches are seen as a competitive threat. The intensity of this perception has doubled compared to last year.

Schermafbeelding 2015-09-22 om 21.13.57

What do you think, will smart watches take over the traditional market for watches?

 

Read more about the Deloitte Watch Industry Study: http://www2.deloitte.com/ch/en/pages/consumer-business/articles/swiss-watch-industry-study.html?id=gx:2sm:3tw:4swisswatch:5awa:6notapplicable:20150918120000:&linkId=17116650

 

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2 responses to “Are you still wearing a watch?”

  1. barbarajepma says :

    Thanks for this interesting post, a topic that has had my interest for a long time!

    Before I started reading your blog I was strong opposed to smartwatches. In my opinion they are definitely less elegant and are less classy than traditional watches. Having another device that needs charging at night and is just a supplement to my smartphone does not seem necessary. However, as supported by your blog, with upcoming developments a smartwatch seems more and more interesting. It might even replace our smartphones and traditional watches in the long run.

    For most people the transformation from wearing a traditional watch to wearing a smartwatch is the trade off between looks and technology. For years most people did not even consider choosing technology over looks when choosing a watch. The strongest arguments against technology being the need to charge it every night, the idea that a watch is an accessory made to only tell the time and the addition of an extra device (Pardiwala, A. 2015). However with the increasing number of possibilities that smartwatches offer, people tend to reconsider this decision.

    At the moment I can relate to people that do not need a watch as addition to all functions that their smartphones have. However, when it comes to functions such as contactless payment or GPS-navigation it would be efficient if you do not have to take out your phone and if you can pay just by using your watch.

    IHS Claims that the smartwatch market will grow enormously from 3.6 million shipments in 2014 to 101 million shipments in 2020 (Macias, D. 2015). I would be surprised by such an enormous increase, but with current developments of smartwatches, especially in classy looks, I think that the smartwatch will eventually replace the traditional watch. The only thing a smartwatch really needs is the look and elegance of a traditional watch with the functionalities of a smartwatch.

    References:
    Macias, Diego. ‘The Smartwatch Market Will Keep Growing In The Coming Years | Androidheadlines.Com’. AndroidHeadlines.com |. N.p., 2015. Web. 23 Sept. 2015. Accessed through:http://www.androidheadlines.com/2015/05/the-smartwatch-market-will-keep-growing-in-the-coming-years.html

    Pardiwala, Ali. ‘You Don’t Need A Smartwatch, But Here’s Why You Should Buy One Nonetheless’. NDTV Gadgets360.com. N.p., 2015. Web. 23 Sept. 2015. Accessed through: http://gadgets.ndtv.com/wearables/opinion/you-dont-need-a-smartwatch-but-heres-why-you-should-buy-one-nonetheless-689689

  2. 354502pg says :

    Thank you for this interesting article.

    To respond to your question whether smart watches will take over the traditional market; I will answer the following: Yes, but it will take longer than expected.

    Currently, from a consumer standpoint, the majority still thinks this innovation is not adding significant value. Indeed, most of the applications present on a smart watch are available on a smartphone. Therefore, the current price seems out of scope to them.

    Another barrier to the domination of the smartwatch is of cultural nature. The classic watch is still recognized as more fashionable than the smartwatch. As it took time for the wristwatch to become acceptable (where previously the pocket-watch was used) and considered fashionable it will take time before people get used to the new watch’s’ design.

    However, smart watches might play a significant role in the future. These tools could become your personal doctor, monitoring your health. As an example it could be equipped with sensors measuring your pulse rate, providing you with live updates with your health, stress levels, recommended actions, and the ability of contacting help in case of emergency.
    The main differentiation tool here, is that the smart watch is “part” of your body, while your smart phone is external to it. This will limit the latter one in efficiently helping out (it will for example be unable to accurately measure your heartbeat and likewise analyses).

    In conclusion, I would say the golden age of the Smart Watch has not started yet. I would situate the beginning of that era around 2020, when that innovation will be able to provide differentiated added value.
    As an afterthought, I believe classic watches will remain in the market for a long time, mostly because of cultural reasons. Even in the remote future, simple watches will continue to exist, but under a niche market.

    https://en.wikipedia.org/wiki/History_of_watches
    https://h4labs.wordpress.com/2015/07/28/in-the-future-everyone-will-wear-a-smartwatch/
    http://www.androidcentral.com/weekly-poll-results-smartwatches-arent-everyone
    http://www.theverge.com/2015/3/9/8172937/apple-watch-smartwatch-history-wristwatch

    Paul

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