Swiss watchmakers say they have no time for tech groups’ advances

March 28, 2014 1:26 pm

Swiss watchmakers say they have no time for tech groups’ advances

By Elizabeth Paton in New York and Tim Bradshaw in San Francisco

Apple is trying to lure top Swiss watchmakers away from luxury brands owned by LVMH in the race to bring mobile computing to the wrist.

Technology groups leading the charge in the nascent wearables sector are jostling against companies in Europe’s venerated horology industry, which face potential upheaval from smartwatches.

Traditional Swiss watch brands claim they are being courted by the likes of Apple, Samsung and Google, as Silicon Valley places increasing importance on the aesthetics and design of new hardware.

But Swatch, the world’s biggest watchmaker by sales, which owns luxury watch brands Harry Winston, Breguet and Blancpain, says it has little intention of working with technology groups.

“We have been in discussions – not ever initiated by us – with practically all players in smart wearables up until today,” Swatch chief executive Nick Hayek told the Financial Times. “However, we see no reason why we should enter into any partnership agreement.”

He added that his priority was to protect Swatch’s intellectual property advantages over tech rivals, including ergonomic design, longevity and battery life.

“Never forget, to make a smartwatch work you need two hands or voice recognition, which again needs a lot of power which is difficult in a very limited space,” he said.

Jean-Claude Biver, the outspoken president of LVMH’s watches and jewellery division, accused Apple of trying to recruit staff from his Hublot brand, and from several Swiss parts manufacturers.

“Apple has contacted some of my employees – I saw the emails personally,” Mr Biver told a Swiss publication, claiming that all those who had been contacted refused the iPhone maker’s advances.

Apple declined to comment, but the Cupertino-based company has stepped up its recruitment from within the fashion and luxury industry in the past year, as it readies its iWatch. Google, meanwhile, is teaming up with Luxottica, maker of Ray-Ban sunglasses, for its Glass project.

Larry Pettinelli, US president of watch brand Patek Philippe, said “it is conceivable that they [Apple] would be interested in developing a type of hybrid with some type of mechanical aspects . . . the Swiss watch industry is very adept at metallurgy”.

Despite the protestations of watch company executives, some industry observers suggest that watchmakers may gain more from co-operation than confrontation.

“The big threat for luxury is that if Apple and other rivals manage to go it alone, then the watchmakers will have lost vital ground in what could be a huge market opportunity,” said Luca Solca of Exane BNP Paribas.

“Apple may decide that they possess sufficient distribution and design resources and that poaching talent is a better option than forging volatile partnerships.”

Should luxury brands feel threatened by the new wearables sector?