Apple Watch: Is it a threat to Rolex? - CNBC Comment

Luxury watchmakers are unlikely to lose market share to Apple – yet
Hey you fancy people who love shiny expensive watches. There is a new player in the market. Meet the Apple Watch, the tech firm’s first push into the luxury market. The wearable device starts at $349 in the US or £299 in the UK for the entry-level Apple Watch Sport. And if you want a little more bling, you can try the gold Apple Watch Edition, which costs between $10,000 and $12,000.

Yes, you heard right. This 18-carat gold watch is Apple’s bold attempt to compete with Rolex and Cartier. Over the past couple of years, Apple has made key recruits from the high fashion world, including former Yves Saint Laurent head Paul Deneve and ex-Burberry boss Angela Ahrendts. Notably, Apple showcased the three collections of its wearable last week in the “Wonder Room” at Selfridges, steps away from all the top luxury Swiss brands.

If you had $10,000, which one would you buy, an Apple Watch or a Rolex? I posed that question at the Apple Watch opening day and most customers sided with the Rolex.

Keep in mind, though, that the Swiss watch industry has had a difficult time, and is said to have exported fewer watches in 2014 than in 2011. And the future looks even more challenging, with tech innovators bringing devices to the market that offer consumers the ability to check email, make calls and view photos.

Apple is hoping its watch will act as a powerful tool for consumers. But don’t expect the Swiss to just sit on their hands. Lots of these players are already starting to get more tech savvy.

Cartier has launched a tech-inspired sports watch and Montblanc has unveiled the TimeWalker Urban Speed e-Strap. Tag Heuer, meanwhile, partnered with Google and Intel to unveil a smartwatch at the Baselworld watch and jewellery show in March.

Analysts at Credit Suisse don’t see the Apple Watch as a threat to the luxury watch industry just yet, saying customers buy the traditional names for their brand equity. A fashion editor at Selfridges told CNBC that “it’s the young entrepreneurs that are part of the digital revolution that will choose the Apple Watch over a Rolex.”

Nevertheless, many financial professionals forecast that the Apple Watch will be well received, especially by those already invested in the Apple ecosystem. Asset manager Piper Jaffray expects $4.4bn in sales in 2015, rising to about $8bn in 2016. This number could dramatically rise as Apple finds ways to enhance the functionality of the watch. And the key may be health care.

“Once I’m able to measure my glucose levels and keep a check on my health, that’s when the Apple and other smartwatches will really take off,” said a former tech executive.

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