I don’t mean to insult your intelligence by the alarmist headline but given all the hype and attention swirling around the release of further details regarding the Apple (NASDAQ:AAPL) watch, this question does come to mind. I know it’s a bit of a stretch, but the reality is the rise of mobile devices like smartphones and tablets have tempered the sales of traditional watches. Who needs a traditional wristwatch when you can simply look at your mobile watch to see what time it is? Moreover, if you’re looking for all sorts of features like chronometers and tachometers, you can do that with your mobile phone.
It is no surprise that while the traditional watch making industry is still growing, it is growing at a much lower pace. Currently, industry growth forecasts see a rate of 3.5% all the way to 2019. That’s not much of a growth rate. Now that the Apple Watch has debuted, a lot of analysts are saying that this might be the end or at least an abrupt disruption of the traditional watch industry.
I think we’re getting carried away. While there is sure to be disruption at the lower end of the market, there are many reasons why people wear watches. In particular, the rugged sports as well as the luxury watch markets will never go away. That much is true. When you wear a Rolex, you’re not wearing a watch because you want to know what time it is. You’re trying to send out messages as to your social status when you wear luxury watches. Similarly, if you are mountain hiking or mountain biking and going through lots of mud, dirt, and grit, the last thing that you would want is to whip out your highly vulnerable and sensitive smartphone or tablet device to figure out what time it is or check its compass features.
There will always be growth areas within the luxury and outdoor watch market. That much is true. Those segments are not going away. For more casual segments, on the other hand, the Apple Watch may bring some serious negative impact. However, since the luxury market and the outdoor sports watch market are slated to grow, there may be some offsets in the future.
