Apple’s range of smart wearables has gained popularity among customers and has somewhat dented the sales of leading watch makers. To tackle this threat, the Swiss luxury watch industry is taking a leap from its traditional production and models to win back customers from the Apple Watch, the head of Tag Heuer told CNBC.
Apple is ‘big competition’
On Monday, Jean-Claude Biver, president of LVMH’s watch division and CEO of Tag Heuer, told CNBC that Apple is “big competition” just like any newcomer entering a different field. On being asked, “How successful has Apple been at selling Watches?,” Biver said that initially it was claimed 10 to 20 million pieces, but later it was expected to be only 5 million units. And even if Apple is able to sell 5 million units, it’s “phenomenal,” as the company is not a watch maker, the CEO said.
“Now how will it act on the Swiss traditional watch industry? Certainly a big competition, huge! It will be a tsunami, for me. In the price segment, between say $200 and up to eventually $2,000,” Biver said. Tag Heuer plans to unveil an $1,800 Android-powered smartwatch on Nov. 9 in an attempt to take on the Apple Watch.
Apple’s Gold watch not a good idea
Apple’s luxury 18-karat gold version of the Apple Watch in the price range of $10,000 to $17,000 has been quite popular. In addition, Apple teamed up with luxury designer Hermes for making the “Apple Watch Hermes,” a new collection of Apple Watches featuring finely crafted leather straps designed by the French fashion house.
Biver accepts that the Apple Watch is a worthy competitor to the $1,800 watch from Tag Heuer but said it is a “huge problem” to sell any connected device priced above $2,000. He said there is a huge problem of eternity with connected watches priced above $2,000. By eternity, he meant that a watch becomes obsolete after five or ten years, and no one would want to spend $10,000-$20,000 on a watch.
Tag Heuer has long been arguing that the technology behind Apple Watch will be outdated eventually, and in the long run, the traditional timepiece will outlive evolving technologies.
On Monday, Apple shares closed down 0.48% at $111.58. Year to date, the stock is down by almost 1%, while in the last year, shares are up by almost 11%.