The past few years haven’t been great for the luxury watch market. Economic downturns, currency devaluations, and the development of the smartwatch — once poised to be the next major tech sector following the smartphone and tablet — helped usher in two years of declines in sales and profits for the Swiss watch industry. The common narrative was that the watch industry was being killed by smartwatches and was ultimately doomed. But much like the introduction of quartz watches in the ‘70s, which nearly decimated the luxury watch market, Switzerland rebounded and is now growing once again.
The smartwatch industry, on the other hand, is going through growing pains. Apple still sells millions of Apple Watches, but major players like Motorola have stopped making smartwatches indefinitely, while traditional watchmakers like Tag Heuer and Frédérique Constant have released hybrid smartwatches — traditional dials with hidden smarts — pushing the market back to a more familiar design aesthetic.
If there’s anything that has become clear since the initial launch of smartwatches four years ago — followed quickly by the decline of the industry into what’s essentially a monopoly — it’s that traditional watches aren’t going anywhere. But how did the Swiss market become the only major sector to withstand an attack of “innovation” from the technology industry in the last 15 years? Different market segments, the ubiquity of smartphones, and the history and timeless nature of a well-made mechanical watch.
Market segments is the easiest point to clarify. Most of the successful smartwatches have hovered around the $300 mark: the Moto 360 ($299), Samsung Gear S3 ($349), and Apple Watch ($369) all start at less than $400. The average sale price for luxury watches in March was $746, according to the Federation of the Swiss Watch Industry. Apple has already given up on its high-end gold Apple Watch line which started at $10,000, replacing it with a ceramic version for a tenth of the price. While Apple does offer its Watch at prices above $700, if you’re buying it for function rather than form, what is the point of spending extra? Smartwatches and traditional watches may share a surname, a design style, and a place on the wrist, but their audiences do not match one to one.
If you flip that, however, putting form above function, and sprinkle in some history and product longevity, you have the recipe as to why the luxury watch market won’t meet its demise anytime soon.
I spent time with three traditional, mechanical timepieces: a Martenero Edgemere, a Frédérique Constant Flyback Chronograph Manufacture, and an Omega Speedmaster Grey Side of the Moon. All three watches feature automatic movements, leather straps, and power reserves that will maintain the proper time for at least a day and a half without movement. But that is where the similarities end. Ranging in price from $550 to $12,000, these three timepieces imbue the major reasons why the Swiss watch market will continue, despite challenges from the tech industry.
The Martenero Edgemere is the most affordable watch out of the three (perhaps because it’s not actually Swiss), coming in at $550. It includes subtle details that make the piece feel much more elegant than a watch in its price range usually does. Available in four different colorways, it features a raised hour ring, textured interior, and a sub dial at the 4.5 position which houses the second hand. It’s powered by a Japanese Miyota 8245 movement, utilizes a domed sapphire crystal, and is one of the few watches that are hand-assembled in the US.
It’s an excellent spring to summer timepiece, casually distinct in its own way with a comfortable handmade leather strap. “We came up with something that I think is our strongest design to date,” Martenero CEO John Tarantino told me. “We tried to create a modern-day, nautical-themed watch that is more about capturing that aesthetic, and there were certain design cues that we pulled from marine chronometers as well. It is definitely a little bit more colorful and a little bit more whimsical than the other stuff that we’ve done. But there’s actually a very complex construction behind that design.”
The Edgemere is the type of watch Apple and its cohorts are looking to take down. But Martenero says he has seen no effect on its sales since the emergence of the smartwatch, likely because it appeals to a different segment of the population. If you’re in the market for a watch like the Edgemere, you’re likely to have more than one watch to wear based on different events and seasons. That just doesn’t work for a smartwatch. The ability to swap bands isn’t the same as the option to completely change models without having a worse user experience, which you can’t easily do with smartwatches without losing fitness data and other features.
Then you have the audience who enjoys (or tries to enjoy) disconnecting from their smartphones. Smartwatches don’t help in that cause. “I feel like, if anything, there has been an effort of people I know to check their phone less, to tune out notifications, and to take short breaks,” Tarantino said. “Like hour-long breaks from their phone. The [smart]watch… is sort of going against that trend or that desire that people have just to take short little digital breaks.”
Frédérique Constant is the company hovering in that middle ground. The company has been known for making luxurious yet affordable watches for years, but recently it has become one of the major players in the smartwatch game, introducing nine models in the last year. But unlike most of the gadget companies, Frédérique Constant went with the hybrid model, a traditional dial with an embedded smart chip, combining its knowledge of mechanical watch design with technology from Silicon Valley. That combination could help the longevity of smartwatches moving forward, because there’s no clear indication on what you will do with an outdated smartwatch in five years.
“The Swiss watch industry is responsible for 65 percent of the world watch sales in terms of value, not in terms of quantity of course,” Frédérique Constant CEO Peter Stas told me in an interview last year. “If you compare that with smartwatches, whether it’s an Apple or Android, you look at the black screen for 95 percent of the time, or even 99 percent of the time. So that is actually completely contrary to what we have seen as the primary reason why people buy watches, which is the design.”
I spent time with Frédérique Constant’s latest traditional piece, the Flyback Chronograph Manufacture, a truly stunning timepiece — the best I’ve worn in some time. The Flyback Chronograph Manufacture I tested features a 42mm rose gold-plated casing with an in-house FC-760 movement that includes 32 jewels and tachymeter scale on the dial. There are numerous dial options, and the casing is also available in stainless steel.
Frédérique Constant has mastered restrained elegance with the Flyback Chronograph. From a design perspective, it can compete with massively successful watches like the IWC Portuguese Chronograph, which comes in at over double the price. It does have its fair share of ornamentations (including a wonderful crown clasp), but it isn’t ostentatious. (If you prefer something even more understated, there is a dark gray model with a silver dial available as well.) At $4,295, the Flyback Chronograph is right on par with Tag Heuer’s most expensive Connected smartwatch, but once again, the market for those two timepieces may not overlap.
Then there is the watch market above $10,000. The Omega Speedmaster Grey Side of the Moon retails for $12,000 (although you can find it for around $7,000). The original Speedmaster was on the wrist of Buzz Aldrin during Apollo 11, becoming the first watch worn on the Moon. The “moonwatch” collection — featuring the equally stunning Dark Side of the Moon — is a celebration of that event.
The Grey Side of the Moon is truly unique, with a 44mm casing cut from a solid block of ceramic, a sand-blasted platinum dial, an in-house Omega 9300 chronograph movement, and a bezel that glows in the dark. It is undoubtedly a statement piece — too big to wear on a daily basis, but perfect for a black tie event.
Yes, the pricing is in the materials, and the painstaking details that watchmakers like Omega add into their watches. And at these prices, there isn’t any competition from smartwatch makers (anymore), and likely little to no overlap in consumers.
“I really don’t think there are many people who are buying $50,000 mechanical chronographs who are going to buy an Apple Watch instead, or people who would otherwise wear an Apple Watch, but then are like ‘Oh no I like this [expensive mechanical watch], I’m going to wear this instead,’” Stephen Pulvirent, managing editor at the watch publication Hodinkee told me. “I think they’re kind of competing on different planes.”
The watch industry isn’t like the technology industry — there is no “best” here — it’s all about preference. Choice is king when it comes to mechanical watches. Rolex has more color, metal, and band options for its Cosmograph Daytona watch than there are options for the Apple Watch. Some may prefer Hublot, while others think of the brand’s timepieces as far too gaudy. Others will choose a steel band over leather every time.
These three watches are all mechanical and have leather bands, but each will serve totally different functions to different people, or could even be owned by the same person. To match that capability with a smartwatch is exceedingly difficult. Smartwatches are supposed to be an extension of yourself, but much like smartphones, switching them out when they don’t match your outfit isn’t a great user experience.
Without a doubt, smartwatches have shifted the luxury watch market in certain ways — it’s taught watchmakers not to get comfortable with their success, and it’s also forced watch companies to engage with technology in ways that they may never have done without a push. “I think, if you had asked them three or four years ago, most of them would have said ‘Absolutely not. We’ll never do that. That’s not who we are and that’s not what we’re about,’” Pulvirent said about watch companies getting into the smartwatch game.
Smartwatches may not kill off the traditional watch market, but it has created an ancillary market that can and will affect tides within a sphere that has only been disturbed a handful of times in the last century. The Swiss watch market didn’t withstand the invasion of innovation by tech companies; it delayed it. But with the next watch-buying generation growing up always connected, and not desiring to be away from the internet like older generations, the time will come when tech companies with fix the issues with smartwatches, and they will once again be a threat to the traditional watch industry. Luckily for them, that time isn’t right now.
Photography by Micah Singleton / The Verge