http://www.economist.com/news/business/21571943-industry-ripe-shake-up-time-money
While smartphones and electronic innovation have severely handicapped certain industries that were once flourishing, for example Kodak and the camera industry, watchmaking still seems to be thriving. Telling the time is exactly the same from a ten dollar watch as it is on a thousand dollar watch, but that seems to be irrelevant to the Swiss watchmaking market, as the demand for their products are primarily due to the image these watches portray. Extravagance and social status seem to have a positive relationship in today's world and Swiss watch brands are benefiting significantly from that. This article talks about how they have managed to perform well in the market and, more specifically, the dominance of Swatch which owns several well-performing watch companies like Blancpain and Omega. Not only is Swatch doing well on its own, but a majority of watchmaking companies rely on it for components. Bulgari, TAG Heuer, and Piaget are only some major names that are using Swatch components. What is interesting to see is how providing parts for direct competitors is affecting the market share of each of these companies. The article states that Swatch will reduce its sale of components to competitors and it makes one wonder what the outcome of this could be. Will this increase the market share of Swatch by a lot or will the increase, if there is any, be insignificant and just cause a loss in revenue from selling components.
Only yesterday it was in the news that one of Apple's latest patent is to do with a smart watch the could be linked to your 'device'. However, I don't think any technological innovation will change the market for watches the way the mobile phone market was changed.
ReplyDeleteThe watch one wears says a lot about the person's wealth and character, similar to what someone's car says about them.
http://www.bbc.co.uk/news/technology-21547947
It would not be unreasonable for one to assume that the number of people that wear watches will decrease. With the rise in smart phones and new innovations like the "Google Glasses", the way people absorb information is quickly changing. People were probably saying the same things about the pocket watch when the wrist watch came on the market. Change takes time, and is difficult, but innovation is a good thing.
ReplyDeleteGreat article. One can say that Swiss watches sell not because of their ability to tell time but because of the social image attached with them. So, in my view, Swatch will continue to prosper as long as our tendency to show-off our wealth remains strong.
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