Sir Jonathan Ive may have seen the future. In a bold statement, the senior Vice President of Design at tech behemoth Apple claimed that the firm’s upcoming Apple Watch product could disrupt Switzerland’s storied watch industry. With pre-orders for the Apple Watch likely being in the neighbourhood of around 1 million units, is Ive right with his prediction? Nearly 1M people in U.S. pre-order $AAPL Watch on Friday per @SliceIntel (Apple declines comment): http://t.co/TZzH6uBL71 — Josh Lipton (@CNBCJosh) April 13, 2015 More importantly for investors in Singapore, should luxury watch retailers like Hour Glass Ltd (SGX: AGS) and Cortina Holdings…
Sir Jonathan Ive may have seen the future. In a bold statement, the senior Vice President of Design at tech behemoth Apple claimed that the firm’s upcoming Apple Watch product could disrupt Switzerland’s storied watch industry.
With pre-orders for the Apple Watch likely being in the neighbourhood of around 1 million units, is Ive right with his prediction?
— Josh Lipton (@CNBCJosh) April 13, 2015
With the Apple Watch’s wide price-points (prices range from the US$349 Apple Watch Sport to the U$15,000 Apple Watch Edition), Apple’s latest device has a price range that’s in direct competition with many luxury Swiss watches.
At first glance, the idea that a digital watch – one that needs to be charged every 18 hours or so and one that can perform the same tasks your smartphone can already do (albeit more poorly) – is going to cause disruption to an industry with hundreds years of history behind it might sound ridiculous.
And frankly, I do not see it either. As a lover of Swiss watches myself, I’m not getting excited about the Apple Watch now.
But having said that, Apple is a gigantic company (for a sense of scale, the company has US$142 billion in cash and equivalents on its balance sheet after deducting all borrowings) with a long history of disrupting industries that it had been new to.
The portable music device business, and then the music publishing business, had been shaken up big-time after the introduction of Apple’s iPod product and iTunes service. And if you’re reading this article with an iPhone, you’re looking at a device which completely changed the mobile phone industry after it was first introduced in 2007.
So, although the threat to the Swiss watch industry from Apple may seem small now, I believe it would be wise for investors, watch makers, and retailers like Hour Glass to keep a close eye on what the tech giant might do next.
We should not dismiss the Apple Watch so soon. To quote Andy Grove, the ex-chief executive of Intel Corporation, “Only the paranoid survive.”
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim does not own any companies mentioned above.