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Analysts believe the Apple Watch may be a factor in declining Swiss watch exports
Analysts believe the Apple Watch may be a factor in declining Swiss watch exports

Apple Watch behind Swiss watch exports decline?

Media reports have suggested the Apple Watch could be behind a six-year low in Swiss watch exports as rumours about a second iteration of the smartwatch emerge.

A report by Bloomberg, citing new figures released by the Swiss customs office on Thursday 19 November, stated that last month, Swiss watch exports reached the lowest point in six years.

It was said that global shipments fell 12 per cent to CHF2 billion (AU$2.7 b) in October. Hong Kong, the industry’s largest market, experienced the most significant decline with a 39 per cent drop in shipments.

The report also noted that the Apple Watch appeared to be impacting heavily on other watch manufacturers such as US brand Fossil Group, which predicted a 16 per cent sales decrease in the fourth quarter due to competition from wearable technology.

Other media reports extrapolated on this point, speculating that the Apple Watch played a larger role in the recent Swiss watch exports’ decline. Some of these reports referenced the latest statistics from the Federation of the Swiss Watch Industry, which showed that exports had experienced a year-on-year decrease each month since the Apple Watch was launched in April, with the exception of June.

According to Bloomberg, high-end Swiss luxury watchmakers were suffering because of eroding profit margins – a result of the surge in the Swiss franc’s value last year. Richemont, the parent company for luxury watch brands including IWC Schaffhausen and Piaget, was reportedly planning to cut jobs amid falling sales attributed to weak watch demand, while Tag Heuer was withdrawing from the once profitable Hong Kong market.

“2015 has been one [year] to forget for the watchmakers,” Jon Cox, a Zurich analyst from Kepler Cheuvreu, was cited as saying.

Apple Watch 2 rumour mill

As the media considered Apple’s effect on the Swiss watch industry, it also speculated on the release of the technology giant’s next smartwatch model – specifically the new additions and improvements it might incorporate.

Among the more widely reported rumours was that the so-called ‘Apple Watch 2’ would feature a thinner OLED display to accommodate a larger battery with a longer life, without changing the watch’s current size or appearance.

In terms of functionality, it was suggested the second model would include a ‘FaceTime’ camera that would allow wearers to make and receive video calls from their wrists.

It was said the new smartwatch would additionally be more independent of the iPhone than the current model due to the incorporation of a chip that would enable direct connection to WiFi hotspots.

Another common rumour was that Apple would be introducing a new watch style to fill the significant gap between the watch’s top two price tiers – the stainless steel Apple Watch and the 18-carat gold Apple Watch Edition.

Amongst the chatter on possible features was speculation on timing. A Chinese news service, United Daily News, recently quoted Barry Lam, chairman of Apple Watch manufacturer Quanta Computer, as saying that a new version of the smartwatch was already being developed.

The Chinese report indicated the new model would launch late in the second quarter of 2016, with volume shipments to occur in the third quarter.

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