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Swatch group first annual loss in 38 years
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cvalue13
·This press does a bit of conflating or glossing over things that may be important distinctions for the OF crowd. Here's one key passage:
"Swatch is more vulnerable than its rivals as analysts estimate it generates at least a third of its sales from watches which sell for under $1,000 - a comparable price point to products made by Apple and others."
This is consistent with what I anticipated in a post from Feb. 2020, just after release of the Federation of the Swiss Watch Industry put out its 2019 look-back press release back on Jan. 28th - and also just after some pop culture press about Apple watches surpassing (in units) "swiss watches" in sales.
Specifically, smart watches are not hurting the sales of quality mechanical watches, but instead smart watches for several years have been hurting the sale of sub-$1,000 watches and especially electronic watches; what I take from this article is that the pandemic has merely exacerbated this long-standing trend of smart watches replacing down-market/electronic watches.
While Swatch group may have been disproportionately hit due to its significant reliance on sub-$1,000 and electronic watches; it will be interesting to see the Federation's 2020 look-back when it releases it's full datasets. It's press release today was grim, but not yet clear the performance breakdown of mechanical vs electronic, luxury vs down-market, etc.
"Swatch is more vulnerable than its rivals as analysts estimate it generates at least a third of its sales from watches which sell for under $1,000 - a comparable price point to products made by Apple and others."
This is consistent with what I anticipated in a post from Feb. 2020, just after release of the Federation of the Swiss Watch Industry put out its 2019 look-back press release back on Jan. 28th - and also just after some pop culture press about Apple watches surpassing (in units) "swiss watches" in sales.
Specifically, smart watches are not hurting the sales of quality mechanical watches, but instead smart watches for several years have been hurting the sale of sub-$1,000 watches and especially electronic watches; what I take from this article is that the pandemic has merely exacerbated this long-standing trend of smart watches replacing down-market/electronic watches.
• By value, the top 5 markets remained the same in 2019, most increasing, but 3 of those 5 are potentially subject to market effects of the coronavirus that could have significant impact on the industry in 2020:
The 2019 dip in HK shown above was caused by pre-coronavirus political unrest, and was offset in 2019 by gains in China; but 2020 has the potential to further hit HK, while also decreasing China sales (not to mention Japan, and the rest of the Asian market that collectively represents >50% of Swiss watch exports). But, if these negative effects come to be, I’d suspect they could hit electronic/smartwatch supply chains just as hard? In any event, it wont be smartwatches that explain any 2020 downturn in Swiss mechanical watches.
While Swatch group may have been disproportionately hit due to its significant reliance on sub-$1,000 and electronic watches; it will be interesting to see the Federation's 2020 look-back when it releases it's full datasets. It's press release today was grim, but not yet clear the performance breakdown of mechanical vs electronic, luxury vs down-market, etc.
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Walrus
·Apple doesn’t break down watches from other wearables but the past quarter numbers were stunning. Hard to compete with.
Apple does not break out wearable sales, instead including the Apple Watch and AirPods in its "Wearables, Home, and Accessories" category, which brought in $6.3 billion during the quarter, up from $5.1 billion in Q2 2019.
Wearables, Home, and Accessories revenue surpassed both Mac ($5.4 billion) and iPad ($4.4 billion) revenue during the quarter. Apple Watch continues to be popular with those who are new to the product, and 75 percent of customers who purchased an Apple Watch during the quarter did not previously own one.
Apple's wearables business is now the size of a Fortune 140 company, according to Apple CFO Luca Maestri.
Apple does not break out wearable sales, instead including the Apple Watch and AirPods in its "Wearables, Home, and Accessories" category, which brought in $6.3 billion during the quarter, up from $5.1 billion in Q2 2019.
Wearables, Home, and Accessories revenue surpassed both Mac ($5.4 billion) and iPad ($4.4 billion) revenue during the quarter. Apple Watch continues to be popular with those who are new to the product, and 75 percent of customers who purchased an Apple Watch during the quarter did not previously own one.
Apple's wearables business is now the size of a Fortune 140 company, according to Apple CFO Luca Maestri.
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cvalue13
·Meanwhile, yesterday I was in two different Rolex ADs, and had never seen their Rolex cases so empty - which is of course saying something. At the larger one with about 50 display slots, there was a single woman’s MOP datejust. The other AD not much better.
I suppose it could just be lack of supply, but according to my longstanding AD contact they’ve sold more Rolex the past two quarters than any other period 👎
I suppose it could just be lack of supply, but according to my longstanding AD contact they’ve sold more Rolex the past two quarters than any other period 👎
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