Blog - iWatch & Switzerland: This all happened before

11/11/2014 iWatch & Switzerland: This all happened before | Transformation Hydraulics
Transformation Hydraulics
THOUGHTS ON BUSINESS STRATEGY, AND HOW TO MAKE IT
WORK. BY NICOLAS SCHOBINGER.
iWatch & Switzerland: This all
happened before
2
So, finally, Apple’s longawaited
iWatch was unveiled last week. And
surprisingly, there is a remarkable LACK of strategic response coming
from Swiss watchmakers in its wake.
Perhaps Apple Design Chief Jonathan Ive is right when he predicted,
“Switzerland is in trouble”.
This all happened before. The iPhone took down whole industries
(pointandshoot
cameras) and market leaders (Nokia, Blackberry).
So, what exactly WERE the reactions to Apple’s new announcement?
Some Swiss watchmakers said they are only “a bit disappointed” while
others dismiss the iWatch as not revolutionary. Still others have gone
as far to proclaim the whole category will flop.
However, a few industry observers seem to be rather impressed. Here
is Benjamin Clymer from respected watch magazine Hodinkee;
Apple got more details right on their watch than
the vast majority of Swiss and Asian brands do with similarly
Sep
18
http://schobinger.wordpress.com/2014/09/18/iwatch-switzerland-this-all-happened-before/ 1/7

“
priced watches, and those details add up to a really impressive
piece of design. Clymer goes on to write that the iWatch will likely hurt the lowerpriced
segment of Switzerland and Asia’s watch market. Apparently
global investors agree as SwatchGroup
has lost nearly 5 percent of its
market value in just one week.
What lessons will Switzerland draw from this? What can Swiss
watchmakers do to stay relevant – even if it is only the lowerend
of
the watch market? Here are some options:
1. Compete on Product
2. Get big into the iWatch Ecosystem (apps, accessories like
straps, underlying technologies)
3. Become a Partner in building the iWatch (manufacture
components, assemble, quality assure)
My favorite is number 3 (see what I wrote here), but it fully depends
on Apple. The ecosystem can be a source of massive value for other
brands – think iWatch accessories like straps or apps like for Nike+.
Competing against the product will likely be the most difficult and
risky. Why?
The iWatch makes a statement, it displays information, enables
transactions/identification, and connects as a node in the Internet. I
think Switzerland will – on lowerpriced
segments – only be able to
compete on a few of these, not on all.
Statement: Switzerland can compete. Swiss watches are a
statement by themselves. Very emotional. Apple seems to have
gotten a lot right, but I believe this one is the home turf of Swiss
watchmaking. This should be a defendable area with limited
effort (ie introduce more personalisation).
Displaying: Switzerland can compete. It will require to
completely rethink the dial without making Swiss watches lose
their identity.
Sensing: Switzerland can compete. Even for sophisticated
sensing capabilities, competition is possible. This is especially
valid if the sensors do not need realtime
complex connectivity.
Transacting: Switzerland can compete only for
niches. Everything will have to fight with ApplePay and other
identification implementations. They will make the iWatch
‘sticky’ on your arm. Big transaction services, further need the
ability to cut massive global deals and provide the necessary
infrastructure. This is a nogo
for Swiss watchmakers; they are
too small and too new to this. But niches might be still
addressable. Notably if they do not need tethering and can

function offline. Successful examples exist like Access from
Swatch and Amvox from JaegerLeCoultre
which opens your
Aston Martin.
Connecting: Switzerland is unlikely to compete in the short
term. You need the ability to either connect directly to the
Internet (unlikely due to battery life) or to tether to a device
with these capabilities. The latter is fully depended on
whether Apple or Google will allow other smartwatches to
connect to iOS or Android.
Summarising, the sweet spot for a Swiss product response to the
iWatch is what I like to call: an augmented watch. It will look like a
Swiss watch, deliver additional information and can be used for
selected identification working offline (ie would not need to be
tethered). Further, it would need to be upgradable to be able to keep
pace with competition, and highly personaliseable visually (size, form,
color, materials, straps).
The Swiss Watch industry has plenty of talented executives on their
payroll. We would all love to hear about their ideas how to deal with
the iWatch. My feeling tells me it can’t be just the relaxed answers
given recently. They will have to take the iWatch more seriously than
they do now.
Copyright 2014 Nicolas Schobinger. All Rights Reserved.
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iWatch:
“Switzerland is in
trouble!”
Could a 'Swiss
made' iWatch alone
add 1%point
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Can the iWatch
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11/11/2014 iWatch Switzerland: This all happened before | Transformation Hydraulics
GDP to
Switzerland?
In Smart
Watches
In Smart
Watches
Posted in Smart Watches, Transformation
Tagged Apple Watch, swiss made
Edit
In Smart
Watches
2 THOUGHTS ON “IWATCH SWITZERLAND: THIS ALL HAPPENED BEFORE”
STEVEN
— SEPTEMBER 28, 2014 AT 05:25 Edit
“Apple Watch,” not “iWatch.”
Reply
Nicolas Schobinger
— SEPTEMBER 20, 2014 AT 21:06 Edit
Today I looked into Apple Watch Edition – the luxury version of the
iWatch. Pricing is yet to be announced. I am wondering if Apples is
going to position this so it eats into eg Brands like Omega or even
Rolex.
Reply
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