Upgrading from an Apple Watch Series 2 to a Series 5

Apple rocked the entire watch industry by selling Watch as a luxury item and electronic and healthcare accessory. Actually, it was more like detonating a nuclear bomb. While the super expensive solid gold edition of the first round of Apple watches was priced at $10,000+ was a disaster that contributed to the exits of Angela Ahrendts and Jony Ive, the problem with the model was one that Tim Cook had big reservations about. It’s a problem with the business model for ultra expensive watches that the Swiss Watch manufacturers did not foresee and are still struggling to find a solution to, and it’s very possible there might not be any. Apple releases new Watches with compelling new features every year, and app developers are constantly releasing new products and updating existing ones.

The traditional upscale watch strategy is that when someone buys a $20,000 Rolex or Movado, they are buying a watch they will want to keep for life and hopefully pass on to future generations. It is not upgradable, and features do not change much, if at all, from year to year, or even decade to decade. There are no apps or in app purchases. Over 10, 20, 30 or more years, there will be repeat Apple Watch purchases by many current and future Watch users, along with app and in app purchases, as well as recurring revenue from subscriptions. Apple Watches can even be used to pay for items in stores, including with Apple Credit Card. Watch helps sell ancillary Apple products like AirPods, and it will probably integrate with the VR/AR glasses we’ve been hearing about for years. Over 5-10 years, the average Apple Watch buyer will generate significantly more income for Apple than a Rolex or Patek Phillipe buyer will for their brand.

And you will rarely get an Apple Watch to increase in value (maybe an original or prototype) like this one bought for $345 in the 70’s. Not sure what those LED Seiko watches go for now.

https://www.cnn.com/2020/01/28/us/rolex-pbs-antique-roadshow-trnd/index.html

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I’ve read many reports on this looking for more detail: all they say is Apple is way higher in quantity (estimated, since Apple doesn’t break out sales numbers), but there’s no mention of how they compare revenue-wise.

Since many Swiss watches are expensive luxury pieces, their average selling price is higher than Apple’s, so even even the whole industry is less, perhaps their revenue is greater? That’s what I’d like to see.

From April 2016 (a year after the first Watch was released): BGR: Apple Watch ‘flop’ outsold Rolex by about $1.5 billion

A once heavily used but still working, original first generation Apple Computer built in Steve Jobs’ parents’ barn and including its manual and a letter from Steve Jobs, went for $671,000 in 2013:

Antiques Roadshow also appraised a hardly used first generation Mac, keyboard and LaserWriter. It has an unverified signature from Woz, and if verified, the Mac would go for about $18,000.

The problem for the watch manufacturer is that the best they get out of sales like this is a tiny bit of good publicity, not even 15 minutes of fame. Apple Watch customers tend to contribute to Apple’s bottom line on a long time, regular basis.

I don’t think there is a problem. You’re comparing two markets that really don’t compete with each other, no matter how much the press would like you to believe otherwise.

Someone who wants a piece of high-tech on their wrist is not going to be satisfied with a mechanical timepiece. And someone who wants a piece of designer mechanical jewelry is not going to be satisfied with a wearable computer.

Said camera manufacturers about 15 years ago.

The market share of people who want wearable computers on their wrists, which is currently dominated by Apple Watch, continues to increase exponentially while the market share of traditional watches is being exponentially cannibalized. Headlines like this have been dominating the watch industry for the last few years. The annual trade fair for watches is so desperate that they just began opening it to the public:

https://www.bloomberg.com/news/articles/2019-10-16/geneva-watch-salon-undergoes-metamorphosis-to-draw-new-consumers

And they have begun marketing products like this watch that is designed to look like a smart watch though it can’t behave as one, and they are charging £274,852 for it:

Talk about shooting oneself in the wrist.

“high-end horology”? Unless it has an atomic clock inside, it’s not high end. That’s the problem for Swiss watchmakers. Their mechanical watches aren’t high end anymore, easily defeated in accuracy and precision by an Apple Watch or even a $10 quartz crystal watch. Anything that regularly uses ntp and/or GPS is bound to be a better timepiece than anything that tries to stand alone.

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I would suggest the demise of the wristwatch market has been happening since before Apple introduced their Watch. Ever since the rise of the smartphone, and maybe even “feature” mobile phones, people (at least people I know) have stopped wearing watches altogether. When asked, the answer is always “why should I when I’m always carrying my phone?”

The fascinating thing about smart watches (especially Apple’s) is that people are wearing them while carrying phones at the same time. But I think quite a lot of that is due to the fact that most smart watches double-up as fitness trackers, not because people want timepieces or to have yet another device alerting you to social media posts.

I am one of those rare holdouts that still wears a watch, but it’s as much about fashion as it is being able to tell time. I’m surrounded by clocks all the time, thanks to my phone, iPod, iPad, computers, kitchen appliances, my car, TV, etc. About 10 years ago, I switched from a cheap Timex digital watch to an analog (quartz movement) wristwatch primarily because it looks better on my wrist, not because of its functionality. Since then, I replaced my no-name brand watch for a Citizen Eco-Drive entirely because I no longer have to worry about changing batteries (and it looks a bit nicer).

I think that’s where the wristwatch market is now. People are buying them as fashion accessories and not for any other reason. Which means the overall market has shrunk enormously.

Is high end defined by accuracy and precision? By whom?

By price. Money talks.

Good grief, how else would you define it? They’re timepieces (look up the definition of horology), not fashion accessories. The fact is that no mechanical watch can match an Apple Watch so far as accurate time over long periods. (Yes, the Apple Watch cheats by periodically consulting atomic clocks. That’s the point.) Yes, there are prettier bracelets, but so far as timepieces go AW is high end and mechanical Swiss watches aren’t any more. (That silly device that the Wired link went to was simply hilarious.)

I respectfully disagree. Nobody spends thousands of dollars on a designer watch (or a smart watch) simply because they need to know the time. You can get that capability in products that cost orders of magnitude less.

This is no different from any other designer/fashion accessory. Sure, a $6000 Versace bag is capable of carrying your groceries, but that’s not the reason anybody buys them and Versace is not competing (in any meaningful sense) with the no-name companies making reusable grocery bags.

Similarly, an Apple Watch (or any smart watch) can tell you the time, but that’s not why anyone buys them. People buy smart watches as a platform for running mobile apps. Displaying the time is a relatively minor feature.

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The New Oxford American Dictionary (in the Dictionary app in macOS) defines high-end, “denoting the most expensive of a range of products.”

OK, let’s shut this discussion down—we’re arguing semantics and to no useful end.

(Whoops, sorry. Didn’t read through to the end of the thread before replying. Delete if you feel it necessary, Adam.)

I think you gravely misunderstand how Swiss watchmakers advertise their watches and why people buy them. Of course they’re fashion accessories.

On Rolex’ front-page, I am greeted by a picture of Martin Scorsese wearing a Rolex. On the Patek Phillipe home page, I am told to “start your journey by exploring our hand-finished timepieces, the history of our brand, and the savior-faire of our artists and craftsmen.”

Both of those have nothing to do with precision time-keeping and everything to do with positioning the watches as luxury fashion accessories.

And thanks, I know the definition of horology.

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I just noticed this article today on MacDailyNews:

In there’s a quote from Financial Times:

The one solace for Swiss watchmakers is that they still generate more revenue: $21bn to Apple’s $11bn. But on current trends Apple will overtake the Swiss on that measure, too, by 2023.

This answers the question I was curious about, how Apple Watch revenue compares with the Swiss watch industry. As I suspected, the Swiss are still ahead overall, but not for much longer.

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