A Smartwatch Industry Report 2015 conducted by Smartwatch Group revealed that the smartwatch industry is expected to grow from US$1.3 billion in 2014 to US$117 billion in 2020, saying “few other industries have such growth perspectives, and the potential to revolutionise how persons communicate, monitor their health, work, and interact with their surroundings.” When smartwatches flood into the market, people would wonder in what direction the watch industry would go forward. Some watchmakers have already given definite answers.
Moët Hennessy Louis Vuitton (LVMH)’s high-end Swiss watch brand TAG Heuer announced a partnership with Intel and Google at Baselworld 2015 to produce “the world’s first luxury Android Wear smartwatch” called TAG Heuer Connected and released on 9 November 2015, aiming to solve the low-value and short lifespan drawbacks of smartwatches with upgradable tech elements, featuring GPS and health monitoring functions. Montblanc which is owned by Richemont has also dipped its toes into this niche market, offering self-developed e-Strap which is a bracelet attached to the traditional Montblanc watch with features of activity tracking, email checking, notification receiving, flight details storage, etc.
Thus it shows that, instead of the friction between the mainstream watchmakers and smartwatch companies, the market has developed a trend of convergence. Anthony Cheung, chairman of the Federation of Hong Kong Watch Trades & Industries Limited told Hong Kong Jewellery, unlike the emerging of the quartz watch in the early 1980s, smartwatch’s influence is limited, especially for high-end and craftsmanship-oriented watch brands. Watch is not a necessity for time-telling, but rather the pursuit of sophisticated craftsmanship, intricate mechanisms, delicate design and carving. He said: “The combination of traditional watch and functionalised smartwatch is an innovative way-out for both parties”.
Korean-American startup Kairos Watches could be an active responder of this attempt. The company is the creator of the first hybrid mechanical smartwatch in the world, bringing together the timelessness of mechanical movements (SSW version of Swiss movement and MSW version of Japanese movement) and the connected convenience of a smartwatch through a transparent TOLED overlay screen on the glass into a single timepiece, integrating a contemporary design with an injection of traditional horological design. When battery runs out after two or three days, the watch still tells time as any other traditional watches do.
For wearers who do not want to be interrupted or over-connected with the digital world, Cogito smartwatch with the sophistication of a precision-crafted traditional timepiece, which demonstrates notifications by LED icons on the dial, must be a suitable choice. “Less is more. We are trying to make consumers’ lives easier while allowing them to be connected through essential features,” said Julien Ribeyrolles, sales manager of Hong Kong-based ConnecteDevice Limited, Cogito’s mother company. The main strength of Cogito is that the low-energy consumption of the company’s Bluetooth Smart technology allows the watch to run on button-cell battery with no need to recharge in several months.
Ribeyrolles expressed that Cogito has the philosophy of “making a smartwatch into a watch but not a substitute for smartphone”. They believe smartwatch needs traditional appearance so that the mainstream market would accept it. “It is really difficult to merge traditional timepiece which lasts a long time, with technology, but we have found the right combination,” he added.
“Electronic products are easily obsolete, which is one of the reasons electronic companies cannot sell a smartwatch over US$500, let alone the more expensive models in precious metals or with gemstones. Nevertheless, our upgradable products bypass the stated problem,” Sam Yang, managing director of Kairos said. Kairos’ hybrid watch is a mechanical smartwatch with upgradable electronic components. Another alternative solution from the company is the T-Band smart strap which holds all smart functions inside the band, turning a normal mechanical watch into a smartwatch.
Yang noted that the reason people wear watches is simply to make a silent personal statement, whilst electronic gadgets cannot feed this demand, which is the challenge electronic companies are facing when developing smartwatches. For well-known traditional high-end watchmakers with distinct brand identity, “they lack human resources and expertise to produce wearable technologies. It will be too risky and costly for them to do R&D, software and hardware engineering, testing and certification on their own,” Yang said.
In April 2015, Kairos announced a strategic partnership with Sequel AG, the exclusive distributor of GUESS Watches and Gc Watches, providing the technologies behind the hybrid mechanical smartwatch and T-Band. For the future plan, Kairos will continue to seek out more strategic collaborations with other watch companies, offering one-stop solution in line with the partner’s brand identity, style, and other customised requirements. “It is a growing trend that almost every single watch company will have some sorts of wearable in the coming years,” Yang estimated. “We are not competing with any watch brands; instead, we are helping them, saving them from losing more sales to smartwatches.”
In the watch industry where brand has been playing a pivotal role, “the cooperation with famous brands is a good way to seek market recognition when we are at the early stage of development,” Ribeyrolles of ConnecteDevice explained. Likewise, Anthony Cheung said that the consumers’ sense of identity of a watch brand’s history, style and DNA generates the desire of watch purchasing. He believes that when smartwatch becomes a leading product category and market segment, the convergence of tradition and technology will have great market potential.
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