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Geetanjali Gamel
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I am an individual, self-taught investor with a Masters in Economics. I like playing with data and mostly focus on finding companies that are undervalued and provide good opportunities for investment, but at times will also look into high growth companies with compelling stories despite their... More
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  • Watch Out For The Smart Watch? 2 comments
    Oct 21, 2013 11:59 PM

    Lately I have been coming across a range of opinions and articles on the smart watch and its future. While some believe it to be the "next big thing" that will be the end of the classic Swiss watch, others label it an impractical fad. I think it is fair to say that besides the novelty, there may be a decent amount of utility in a smart watch. Certainly the primary purpose of a watch is to tell the time. But we have seen with the advent of the smart phone that all the other functionality and features, besides the core function, soon became the new normal. Similarly for smart watches, social media, texting, maps, camera, etc., could all be features that change what consumers expect a watch to do. So is the smart watch going to devour the market share of the traditional, high-end Swiss watch? There are three reasons I think that luxury watch makers have a good chance to hold their own.

    1. Practicality: The smart watch does have potential to be a useful little gadget. But as we have seen in reviews, like that of the Samsung Galaxy Gear smart watch, this product category still has a long way to go before it proves to be practical enough. Everything from screen size, battery life, to alerts and apps are challenges at present and the advantages over simply using a smart phone are not established yet.

    2. Target Customer: Another aspect that comes to mind when comparing smart watches to Swiss watches is the clientele that is being targeted. Typically a customer buying a luxury watch is making a statement about wealth and style. I think that an expensive Swiss watch is more aligned with jewelry as a product, rather than a gadget. While smart watches may capture the imagination of a tech savvy customer base, there is still a market for old fashioned luxury.

    3. Overlap: Even if the smart watch is able to break into the high end watch market, who's to say that the Swiss watch cannot coexist with it? For a collector, there could be room for both in the collection and there could even be a hybrid Smart Swiss watch for those that want both beauty and technology.

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  • DAG1996
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    Comments (3066) | Send Message
     
    Good points, well made. I remember when digital watches first came out and there were the same claims that regular watches would go the way of the dinosaur. Well digital watches have been around for nearly 40 years now and we're still waiting. I shy away from zero-zum thinking in most any context so my conclusion is that a market is likely to grow for smart "watches" ... or, perhaps a similar variation of wearable computer devices that just happen to include the time, as all computer devices do. However, that doesn't mean smart watches will replace regular watches.

     

    I do believe, however, that regular watches will become less and less popular as time goes on (no pun intended) since most young people use their phones to tell time, don't wear watches at all and seem unlikely to change that habit as they get to the age range who wear watches as a habit established throughout life, if nothing else (like myself). For older people, a watch tends to be just a normal part of dress more than a necessity for the time functionality, but today's young people are tomorrow's old people. I guess only time will tell (pun intended).
    22 Oct 2013, 02:24 AM Reply Like
  • Geetanjali Gamel
    , contributor
    Comments (31) | Send Message
     
    Author’s reply » thanks for reading and commenting...agreed that many people use phones instead of regular watches already and who knows what may even replace that in the future...but I think that the high end luxury watch market already caters to a certain kind of taste and preference which cuts across age demographics ...but you're right , time will tell!
    23 Oct 2013, 01:15 AM Reply Like
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