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Fossil CEO: Wearables Smothering Swiss Watch Business
itwbennett writes: I think technology and the whole idea of wearables ... has taken some of the oxygen out of the Swiss business,' Fossil CEO Kosta Kartsotis told analysts on a call to discuss the watch maker's second quarter results. These new competitors, along with other factors like a strong U.S. dollar, contributed to Fossil's quarterly revenue decline, Kartsotis said. Last week, a report from market research firm NPD Group claimed the Apple Watch was partially behind the largest slump in U.S. watch sales since 2008.
"Last week, a report from market research firm NPD Group claimed the Apple Watch was partially behind the largest slump in U.S. watch sales since 2008." And according to the article, "Retailers sold $375 million of watches during the month, 11 percent less than in June 2014 ... a 14% decline in unit sales."
Put another way, the Apple Watch led the US in the largest sales boost in watch history, with an estimated $4 billion in sales so far.
It's almost impossible to feel bad for someone who produces such a clearly inferior product get handed their asses when the competition arrives. If Fossil had been producing watches people really wanted, part of that $4 billion would have been theirs.
John
So now "taken some oxygen out" is the same as "smothering"? LOL! Smart watches are a fad, like tablets. People with money to burn want authentic watches, not expensive toys that need to be charged every other day and get fucked by software updates.
Wealth is the gift that keeps on giving.
Stupid.
Swatches aren't cool anymore? I saw the end for Crocs pretty early on...but this? Never!
"fossil", just like the products he makes.
Analog watches are jewelry for people who want to make a fashion statement. Digital watches are for people who want a smartphone on their wrist.
Its not really wearables, the basic cell phone has dramatically decreased the need for a watch, even for someone old like me. As have most of the devices we use or devices that happen to be in the room with us. Computers, tablets, cable tv boxes, microwave oven, etc.
Wearables are just the latest device in a long string of devices reducing the utility of a wrist watch.
My watch wouldn't get used at all if it were not for scuba diving. Besides being old I'm also a software engineer, analog depth gauge and analog watch to backup that dive computer.
I wear a mechanical automatic watch made by Hamilton with a swiss internal and love it.
It is nice to have something so traditional and mechanical in a digital age, I love the sound that it makes, I love how amazing the mechanical construction of it is and how I can see it work on the back side of the watch.
But the again, I also work with large IBM tape libraries and love to see that picker do it's work so I guess I have a thing dor mechanical things in general.
Same thing happened in the 60's and 70's when quartz watches were so much cheaper and accurate compared to mechanical movements.
Mechanical watches will always be a niche market and will never go away. I'd rather have a watch that will last 50+ years and still look and sound good after that time. Take your pick, you got: Omega, Rolex, Breitling, Seiko, etc.. plus high end makers like Patek Phillip.
Sure the swiss watchmakers will go through their slump, but after the novelty of fancy usb charged smart watches wear off you'll always have the artistic mechanical movements of old.
Sorry I don't buy it. I think the fact that everyone carries cellphones and every cellphone displays the time on the face is what is behind his watch slump. I haven't worn a watch in years and it has nothing to do with apple's product.
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I used to get the New York Times almost every day, usually through school or my gym. Every day, I'd see advertisements from the big Swiss watchmakers, usually full-page and usually showing off detailed shots of the insides of the watches. That right there signifies what their market is - older people with lots of money. There's no way I could've afforded one back then, and though I probably could afford one if I saved long enough now, I have no reason to do so. Wearing a high-end watch is one more thing I have to worry about losing or having stolen or getting damaged.
Really, the answer to their problems is right in front of them. These people know how to make a watch, and there is no shortage of stylistic complaints about existing smartwatches. All they'd need to do is team up with an existing smartphone company that doesn't have a smartwatch of their own and start offering "Swiss-style" smartwatches at a reasonable price. They'd be rolling in money, assuming they can fix the style issues.
Roll de bones and yad had known.
I've met one guy who has one. Also met a few people with the Galaxy Gear, but usually it was something that was thrown in free/cheap with a plan.
If smartwatches are smothering the sales of (certain) Swiss watches, they must have been on life-support to begin with.
... are extinct. People I know that still have watches, most of them have watches as a fashion statement. It's a jewelry.
Other groups I'm aware of are old people who need glasses to see their phone screen, and "some" rich people to show off. Who the f needs a $1000+ USD watch ? Never mind $5k+.
Eventually they gonna disappear all together same as pocket watches did.
It's called evolution. Either you keep with the times or eventually you loose your business and get forgotten.
They sound like a buggy whip maker.
I'm not really their market, not wearing a watch or having any use for wearables, but do you really think there's much overlap between the group of people who will buy a high-tech smart watch, and the group of people who would buy technology of any sort from a company called Fossil?
This story is amusing because a company named 'Fossil' produces obsolete products.
The decline in the swiss industry is mostly down to the reliance on swatch movements. These are largely standardized and big. This results in a huge number of similarly sized 'divers'/'pilots' watches with only small differences in case design and marketing effort. The design of the movement has even been licensed to chinese firms so knockoffs of the main brands can be very convincing.
In the end the choice is been something that acts like a boat anchor and can tell you the time and date or something of the same size that can actually be more useful.
Personally I think a watch is far from a status symbol now and is more an indication of someone who is easily lead be marketing or a basic wage slave. (Look at the little darling, he likes his collar, doesn't he, yes he does, yes he does. ... gets pat on head.)
Time to find out what's dangerous about the smart watches/wearables. All they need to do is kick off a "think of the children" argument, and *boom*, politicians will line up to ban wearables.
Obvious problem: wearables (together with smart phones) are a much larger market, and will have a stronger lobby.
I'd say they've chosen their name well: Fossil.
A current fad favors one kind of overpriced status symbol over another. News at eleven!
... I mean... I haven't had a watch in years. Why? I carry around this cell phone with me everywhere like a pocket watch. The damn thing is linked into atomic clocks and changes times based on what time zone it is in... its got more elaborate warnings etc than any watch could claim.
And lets not forget that the "EVIL iWATCH"... is really just slaved to the stupid phone in the first place. Its the cell phone killing the watch.
Not the wearables. At this point, the watch is basically a fashion accessory. Sort of like hipster glasses.
The swiss watch was a big deal because it was very precise. It was high tech. When was the last time a swiss watch was actually high tech? Casio pretty much blew their brains out decades ago. You could get a cheap shit 5 dollar digital watch that was about as precise as a comparatively expensive swiss watch. Why buy the swiss watch over the casio? Status... "look at this expensive thing I bought"... Meh.
So yeah, Apple is eating that market because their 10k gold watch is pretty much a comical ego trip.
Am I generally negative on wearables? I am on ones that are slaved to a single vendor or that explicitly rely on the cell phone while presenting themselves as being anything but precisely that.
The one I like the best so far are the Pebble watches. They at least don't have you recharging the fucking things every five seconds.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Watches are just going back to their niche again.
The only ones that buy them, typically, are people that do it because they collect them, are of an older generation, or want to show off their nice new [insert brand] to everyone ever.
My uncle is in the middle, he is of an older generation that loves watches. He buys couples watches for him and his wife.
He always goes to this same place on holiday, this guy that has been buying watches in bulk for years off of other retailers, watches that are usually junked, broken or other, fixes them, sells them for minimal profit. He does it out of the pure love for watches.
My mothers boyfriend, he collects watches as well. Has a bunch of neat watches.
You just have to accept your new markets, that's all.
The majority of people will always flock to an objectively superior product.
Something with more usefulness will always take priority.
For that, most people will be happy with a phone. Others are slowly taking up wrist computers like smart-watches.
The decline will continue, but it will stop eventually. There are still large numbers of people that love watches.
Fossil CEO...
Perhaps the name of his company should be a clue.
Fossil... they're the ones who's digital second counter goes from 01 to 60 rather than 00 to 59? Yeah. I'll pass on getting a watch made by them.
I'm not sure what aesthetic they were going for, but they missed the mark. You can argue about features and such, but it is ugly.
That's what happens when someone makes a better product than yours.
Now that cancer has metastasized and many other tiny countries that do not have the natural defenses of Switzerland are offering similar money laundering facilities. If their watch and clock industries die, if their chocolates and cheeses go out of fashion it would be a good beginning. But death of their banks is what we are really rooting for.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
What's funny is back in the day, Fossil was one of the first "Wearable" smart watch manufacturers. I had a original Fossil Abacus watch that ran PalmOS 4.x. Black and white display, and had a docking station that used RS232 to sync to my desktop to transfer applications, sync calendar, contacts, etc. It even had a little mini stylus that slid into the watch band. I had this in 2004, more than 8 years before what I consider the first mainstream wearable smart watch the Pebble came out in late 2012 early 2013. They only had a day of battery, and only displayed the time if you hit a button on it, and did have a backlight. I abandoned it in 2006 once the battery life degraded a bit and wouldn't last more than 8-10 hours. Loved it though, was even used to using graphiti to input characters onto the watch, a concept I wish some newer smart watches had. (Character input and touch screens that is). For anyone that wants to check it out, there's a brief Wiki article on it. https://en.wikipedia.org/wiki/...
The fact it took this long is shocking. The only people I know that wear watches are GenX or older, or they have a collecting hobby associated with them. Watchmakers, particularly mechanical ones, are going to become very small niche players soon.
Fossil is a maker of cheap fashion watches. Stuff people tend to throw out or forget about when the battery dies. I'd imagine these would be easily replaceable by other watches worn to be trendy and with a relatively short expected lifespan (see smart watch). I'm not knocking Fossil by the way. They are a nice watch in their target market.
These watches are in an entirely different category from the heirloom Swiss watches. Watches with mechanical movements and top quality cases assembled by craftspeople with years of training. I don't think many people are forgoing their purchase of an Omega, Rolex, Patek, etc. because they are picking up a smart watch instead. These watches fill a special niche. They'll never thrive like they did before the quartz movement (when even non-luxury watches were spendy), but they won't be supplanted by wearables in the next few years.
Last week, a report from market research firm NPD Group claimed the Apple Watch was partially behind the largest slump in U.S. watch sales since 2008
Apple Watch certainly wasn't the first SmartWatch; but I don't remember any Report like the one from NPD Group until after the Apple Watch was available.
Hmmmm. Coincidence?
Their mistake is in calling the Apple Watch a watch. It is not, and the Apple watch does not compete with fine watches. It does, however, compete for that spot on the wrist just as your smart phone competes for that spot in your pocket for your beeper, calculator, electronic Rolodex, flip phone, etc.
The Swiss watches that are taking a hit are the low-priced fashion watches ($300-$700), and not the $5,000 Rolexes et al.