Swiss Watch Luxury Labels Challenge the Apple Watch

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By Jacob Maslow

Apple Watch on StandI guess this was very easy to call. I guess this development should not be surprising at all. In fact, it should be expected. Since the Apple Watch is supposed to debut costing several hundred dollars, it is no surprise that many renowned luxury watch labels will jump into the digital watch market with both feet.

If anything, Apple’s foray into the luxury timepiece accessory market is a shot in the arm to the global timepiece or chronograph market. Whether we’re talking about luxury sports watches, luxury watches, or outdoor watches, it doesn’t really matter. The moment you are ready to pay several hundred dollars for a watch, you are dealing with a luxury item.

When it comes to luxury items, you really can’t get any better than the French luxury group, LVMH. This is the company behind Louis Vuitton and TAG Heuer. Since there are enough zeroes luxury smartwatch price, expect these recognized global names to jump into the market that Apple is revolutionizing.

Of course, there are still a lot of uncertainties in the smartwatch market. I have already mentioned earlier that wearable wireless is probably not going to be the product sector that would put Apple (NASDAQ:AAPL) over the $1.2 trillion market valuation mark. It has to be something more dramatic because if you assume that the smartwatch is a runaway hit, at best, it’s going to contribute maybe 10% of Apple’s total bottom line.

The sad reality is that Apple is still highly dependent on the iPhone, and it’s not every year that Apple will roll out a new phone factor. I maintain that it’s the main reason why Apple reported such massive profits last quarter. It changed its design, and it released a bigger phone. This pushed almost all the existing Apple phone owners to upgrade.

It’s kind of like driving a Toyota Camry of a certain design. Suddenly, Toyota makes an announcement that the next year’s design would be dramatically different. What do you think will happen? A lot of these loyal Toyota owners would want to trade up because they want to stay with the times.

That’s exactly what happened with the iPhone 6. It’s not like every year that there would be a revolutionary new phone factor. So maybe last quarter’s earnings is one of deal until there is another giant leap forward in terms of phone factor and design. That doesn’t happen every year. Accordingly, for Apple to keep expanding its market valuation, it has to come up with something more dramatic than the smartwatch.

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