Swiss watch makers like TAG Heuer, the biggest brand in luxury goods group LVMH’s watch portfolio, had until recently largely dismissed the threat of “smart” gadgets, but LVMH watch chief Jean-Claude Biver says he had changed his mind on the subject.
Not a big surprise.
Matt Richman’s thoughts on the news:
In order to have even a chance of being as feature-rich as Apple Watch, then, TAG’s smartwatch will have to pair with an Android phone. However, TAG wearers aren’t Android users. Rich people buy TAG watches, but rich people don’t buy Android phones.
I agree.
First Finland, now Switzerland….Next!
Rich people neither buy android nor TAG Anyways… Rich People buy Jaeger-LeCoultre, Breguet and other brands most people won’t recognize… But TAG is a no, no brand for that segment so they can still pair with Samsung.
On the other hand, the iPhone goes from mid segment up to the upper segment where the Vertu sold – that were one of the reasons of rolling out the Golden iPhone (to take sales away from a tumbling and weak Vertu).
Seeing what has come of Vertu, originally the Nokia’s Luxury Arm, strategically disposed in 2012 to EQT VI investment. It subsequent near disappearance from jewelers, I’m afraid EQT isn’t very happy with their rough deal.
But EQT VI sure will be all ears if TAG wants to bid over Vertu. But still I don’t see any how they could mix a cell phone will a basic model that has a tag five times above the price of most of TAG watches and target the mix to “Rich People”.
Sounds like if Aston Martin put up a package to sell the DB Volante with a Pioneer Sound System… Certain things simply don’t mix like water and oil.
I am sure that there are rich and dumb people.
The only real marketing space open to these brands is luxury, timeless, jewelry, heirloom. TAG is really none of these. Given a customer has only one wrist (very few Norm Schwartzkopf or N. Hayek two watch wearing types out there) when that wrist is populated by a truly useful and attractive appliance, brands like TAG will have to strive to move upscale (or partner with a handset maker) or wither.
I think these would be good stocks to go short on. As well as brands that will be subject to being taken-over.
I predict that Watch will spur more change and consolidation in an already consolidated industry.
There is a massive gap in basic logic. iOS is used by a plurality of wealthy people != rich people only use iOS
One of the links from the linked Google search that claims that rich people don’t buy Android is a Pew poll. In that Pew poll there is this nugget, “fully half—49 percent—of cell phone owners with a household income of $150,000 or more say their phone is an iPhone.” That still leaves 51% of the high income population that is not using iOS.
http://www.eweek.com/mobile/pew-everyone-buys-android-rich-educated-people-buy-iphones/
There won’t be a TAG Heuer smartwatch, or if there is they’ll have a new CEO pretty soon after. There’s no way they can get anything other than a total piece of crap out before the Apple Watch ships, and once the Apple Watch ships there will be as much room for other smartwatches as there was for other personal music players after that iPod, although much sooner.
I also think the threat to the existing watch brands is over-rated too. No one who buys >$1000 watches now will stop once the Apple Watch ships, especially the lower-end sports/racing associated brands like TAG and Oris. They’ll probably add an Apple Watch to their collection. (disclosure: I fully intend to buy a stainless steel Apple Watch despite owning 3 TAGs and 2 Baume et Merciers).
“No one who buys >$1000 watches now will stop once the Apple Watch ships”
No one? But anyway, “now” is not a very forward looking term. As new buyers age into the market what will most likely be their first luxury watch purchase? Every Apple watch sold is a missed sale for the others. And if they are useful enough to be indispensable on the wrist, even fewer sales. Who knows?
A new brand stepping into an old world market and instantly having the incumbents playing catch up is a fascinating scenario. Can’t wait to see how it actually plays out.
The non-gold Apple Watches are NOT luxury watches. They’re just not what anyone who knows watches would call a “luxury watch.” The Edition watches are a different story, but just because of precious metal content.
It’s not a question of what will be a new buyer’s “first luxury watch purchase”, but what will be the first $1000 wrist device purchase? Who’s buying an automatic TAG Heuer and saying, “It’s great but I wish the tiny mechanical device on my wrist would play Angry Birds!”? Each Apple Watch sold is “a missed sale” the same way that every child’s college education paid for is a missed sale for Porsche dealers. An Apple Watch purchase may delay that first, true, luxury watch purchase, but if you want a tiny mechanical device on your wrist, you’ll get one, regardless of whether you also have an Apple Watch or not.