We’ve all heard the story. Swiss watch brands were doing just fine until a crisis of epic magnitude wrecked the industry. The rather expensive Seiko Astron’s appearance just in time for Christmas 1969 was merely the prelude to a massive onslaught of cheap quartz watches from Asia. Prestigious old historic Swiss brands went out of business, and only after more than a decade of grueling hardship did mechanical watches find a renaissance under people like Jean Claude Biver at Blancpain.
Like all myths, the quartz crisis has elements of truth mixed with elements of fiction. Certainly the race to the bottom in terms of pricing put tremendous pressure on the Swiss watch industry. However, perhaps quartz is not the villain it is made out to be. Long before the battery powered ticking took hold on millions of wrists, cheap disposable Roskopf pin lever escapement watches fulfilled the demand for inexpensive timepieces. In that time more money spent meant more accuracy. A carefully constructed jeweled movement, painstakingly polished and adjusted by the highly skilled hands of an experienced Swiss watchmaker, was much more accurate than a pin lever Timex bought for a dollar. Quartz’s real revolution was to democratize good timekeeping so that the common person could track the time as well as a titan of industry. Expensive Swiss labor had to look for other avenues, and cheap, disposable “fast fashion” Swatches on the low end and fancy men’s jewelry in the form of wristwatches on the high end restored their jobs and prestige.
Nowadays a further democratization of timekeeping has emerged. We live in a world where the Chairperson of the Board may be wearing the same watch as the receptionist. The Apple Watch has achieved ubiquity. Are we doomed to have our heartbeats monitored by every technology company that can cram an ad onto a screen in our immediate vicinity? Even Hodinkee, that arbiter of good taste on the wrist and beyond, has no fewer than 24 Apple Watches for sale on their website right now. There is no more quartz crisis. There is only an Apple that instead of putting us to sleep like Snow White’s apple, keeps us awake night and day with its non-stop alerts and reminders.
Affordable watches are the victims of the Apple Crisis. Fossil Group, purveyor of fashion watches, has lost tremendous revenue. Seiko has invested big time in moving upmarket by first separating out the Grand Seiko brand to add prestige and then coming with the premium Prospex and Presage lines. Citizen recently launched Accutron as a separate brand at a higher price point than Bulova as a vehicle for the novel electrostatic movement and Sellita powered mechanical watches. The most successful brands in this space are Daniel Wellington and MVMT. They operate by using social media marketing techniques combined with making watches in the cheapest possible way. A race to the bottom in terms of quality, heritage, and price has ensued.
Every crisis begets a solution. Independent brands have moved into the space vacated by the larger brands and now offer innovative designs and ever-improving quality. Perhaps decentralization will fill the gap in delivering thoughtfully designed affordable timepieces. Look to passionate watch enthusiasts, empowered by access to the internet and global supply chains, to drive the future of the watch industry.
In 2019, Apple sold 31 million watches, an increase of 36% from the prior year. The entire Swiss watch industry sold 21 million watches, down 13%. The first quarter of 2020 had a 20% growth in smartwatch production with Apple accounting for more than half of the sales. Although many Swiss watches are luxury items at a much higher cost, the inexpensive quartz watch is rapidly becoming obsolete. It was the profit from the inexpensive Swatch that drove the revival of Omega and other watch brands under the Swatch umbrella. The smartwatches from TAG Heuer and others have failed to catch on, to put it mildly. Software and an app ecosystem are as foreign to the Swiss watch industry as mass production of quartz crystals and electronic circuits were in 1969. We will find out over the next few years if the Swiss watch industry can sustain itself while losing the smartwatch segment.