Watches are getting sleeker and prices are falling
The wristwatch industry is changing drastically, thanks to new technologies and improved functionality.
These advances produce greater variety and lower prices for quality watches. For those who want to connect to the internet, which makes a fashion statement, the choices are endless.
Wristwatches have evolved, thanks to micro-manufacturing, miniaturized electronic components and cheaper materials. Yet, handmade haute couture watches carry on their centuries-old tradition, dating back to 1510, when Peter Heinlein invented the first watch in Nuremberg, Germany.
Watches exist on a broad spectrum – from utilitarian to works of art.
Watch sales today stand at $73 billion, and the watch market is expected to grow 5% per year, according to Statista. China is the main generator of watchmaking revenue, mainly thanks to the manufacture of quartz parts which rely on integrated circuits and a crystal oscillator.
Quartz smartwatches are contributing to the fundamental shift in consumer tastes and sales. This category will see 76% of all watch sales in 2022 come from the non-luxury goods category, as opposed to the high fashion mechanical watch segment, Statista said.
Luxury watches always capture the imagination
While the watch market has split between modern functionality and luxury, high fashion watches continue to characterize the industry. In terms of global popularity, the luxury watch market reached an estimated revenue of $7.18 billion in 2019 and is expected to reach $9.28 billion by 2025.
What is behind this request?
The use of rare gemstones and precious metal products and the desire of women in countries with growing economies to modernize their fashion accessories. Due to rising incomes, wealthier consumers in China, India and Brazil are buying more luxury watches. This leads to more limited production of haute couture styles and new lines introduced by Tiffany, Patek Philippe, Bulgari, Serpenti, Incantati, A. Lange & Sohne and Saxonia Thin.
Watchmakers use innovative styles, such as neo-vintage or new materials (ceramic, titanium), to produce timepieces that honor classic designs, reissue old ones, or reinvent inspired timepieces.
For example, new engineering allows TAG Heuer to offer its solar-powered Aquaracer or its diamond-centered tourbillon chronograph. Grand Seiko has also pushed its style limits by offering a tourbillon watch.
For non-watchmakers or watch enthusiasts, a tourbillon is a mechanism that constantly rotates the balance wheel, hairspring, and escapement while the watch is running. This is done to counter the effect of Earth’s gravity on the periodic time-measuring properties of the balance wheel and mainspring. The tourbillon was invented by Breguet in 1795 and patented in 1801.
The watches are not only handcrafted by Swiss craftsmen, although they continue to dominate the production of high-end branded mechanical parts in the luxury market segment.
Instead, consumer tastes now favor non-luxurious functional watches that connect the device to the internet. The popularity of inexpensive, mass-produced watches is nothing new. It started during the Civil War, when the Waltham watch company started making inexpensive watches for the Union Army.
The domination of digital watches
Since the first digital watch was introduced in 1972 by Hamilton, manufacturing costs have dropped dramatically. This first digital watch sold for $2,100, or about $12,000 in current dollars, but by the early 1980s the cost of a digital watch had fallen to less than $10.
“Over the past decade, materials science and production using silicon have become a big priority in high-end watches,” Dave McConnon of North Seattle College’s Watch Technology Institute told Zenger. “Although expensive in terms of R&D and initial investment, the product is much more reliable in the long term, while being cheaper, because it has fewer components and steps.”
Many quartz watchmakers focus on the oscillator and escapement mechanisms and “compress designs that take a series of about 13 components that are all machined and replace them with one component that is printed or ‘developed'”, McConnon said.
He also expects the cost of a quartz watch, the best-selling style, to continue to drop.
Falling costs, combined with more advanced Bluetooth-driven features like heart rate monitors and sports tracking, have also made smartwatches more attractive and popular. It also made Apple the leader in this category.
The Apple Watch adds about $12 billion to $14 billion a year to Apple’s revenue, according to Business of Apps. The site said that since the introduction of the Apple Watch in 2015, it has dominated the smartwatch market claiming a market share of over 50%. This product has shown double-digit growth from 2017 to 2020. Sales of Apple Watches increased by 40% between 2019 and 2020, according to Strategy Analytics.
Other experts expect this trend to continue. In 2021, there were approximately 63 million smartwatch shipments worldwide. Experts predict this market will grow to 113 million shipments by 2022.
New technologies, brands and styles
There are several reasons for the proliferation of new brands and designs in watch offerings. The main thing is that more and more companies are offering quartz movements made in China, Switzerland and Thailand, as well as other vital components that can be obtained and assembled elsewhere.
Purchasing key components and reassembling them led to a proliferation of new styles, unisex watches and the expansion of looks, ranging from the chic to the ultra-slim to timepieces known as “art kinetic”.
One notable company introducing new styles is MB&F, based in Geneva, Switzerland, which began working with H. Moser & Cie in 2020 to create cutting-edge new products.
MB&F has created buzz by producing timepieces it calls “machines” or “kinetic sculptures” rather than producing watches and selling them as works of art. To present the MB&F collection, the company avoided traditional watch stores and exhibited them in Machine Art Design galleries in Geneva, Dubai, Hong Kong and Taipei.
Established luxury brands are also making mechanical advances, especially in the competitive category of extremely flat watches. At Swiss luxury manufacturer Chopard, the 162-year-old company introduced its automatic self-winding flying tourbillon in 2019. This limited-edition watch collection is just 3.30 mm (0.12 inches) thick and, according to Chopard’s description, “is equipped with Chopard Twin Technology, based on two superimposed barrels and a 22-carat micro-rotor”, which “guarantees 65 hours of power reserve”.
As thin watch technology becomes more advanced, Piaget launched its Polo Skeleton in 2021, which is 2.44 mm (0.09 inches) thick, while Bulgari is also a leader in this ultra-thin category.
Launch of a micro-brand in West Palm Beach
Driving the launch of new micro watch brands is the wider availability of high quality movements, pre-assembled motors including the gears, wheels and pinions that drive the part.
This increased availability of essential parts has allowed Christopher Gonder, owner of Bennisson Watch Repair in West Palm Beach, Florida, to launch his new limited-edition brand.
Bennisson’s new line is set to launch in the fourth quarter of 2022 and will consist of 33 limited first-edition watches. What will set the watches apart, Gonder said, is the copper face artwork on each watch face that tells a story. Mechanically, each watch uses a tourbillon movement. However, while some high fashion watches using a tourbillon sell for $100,000 and up, the new Bennisson brand will sell for between $3,500 and $4,000.
“It’s an exciting time in the industry because China is assembling movements that have excellent quality, superb decoration and articulation,” Gonder, a former investment banker and watch collector, told Zenger. “It is possible to buy them, package them and create an image for your brand.”
The counterfeit problem
Imitation being the highest form of flattery, luxury items are a prime target for counterfeiters. This is especially true for the mechanical luxury watch segment with classic, clean designs that are instantly recognizable.
In May 2022, U.S. Customs and Border Patrol (CBP) in Indianapolis alone seized 460 counterfeit Rolex watches, which, if genuine, would have been worth $10 million had they been sold at the suggested retail price by the maker. In April 2022, CBP officers in Indianapolis confiscated three shipments of counterfeit watches worth $20 million if sold at retail.
In 2021, clothing and accessories topped the list of seized goods and accounted for 30% of all IPR seizures. However, CBP said that in terms of value, watches and jewelry were the main items seized and were worth more than $1.18 billion, or 36% of the total.
Purses and wallets came in second with seizure lines estimated at more than $972 million, corresponding to 29% of the total value of goods seized due to intellectual property rights violations, according to CBP .
This story was provided to Newsweek by Zenger News.