The Apple Watch: A Luxury Watch Perspective

Ah yes, the Apple Watch.

Now that the dust has settled and the instant analysts have had chance to catch their collective breath, let’s cut through the hype and put the newest “wearable technology” into perspective.

At The 1916 Company, watches are our passion. We buy luxury watches, sell luxury watches, and I know that when I go home at night, I log onto the watch forums at Timezone, PuristS Pro, and Watchuseek to continue the madness. So yes, we were following last week’s Apple bombshell with curiosity.

Given the volume of interest from our office, customers, and the mass media, we thought it best to give our thoughts on the new Apple and contrast the contraption with true luxury watches.

Ironically, the greatest surprise to emerge from the Apple Watch unveiling is that fact that Apple’s latest segment-buster isn’t a “watch” at all. Apple CEO Tim Cook said it best at the press conference, “This is a product which will change what people expect from wearable technology.”

Cook’s concurrent email to Apple employees presented the new device as everything but a timepiece. In fact, he only used the word “watch” three times – in three references to the product name. The Apple Watch is a Watch-In-Name-Only (WINO).

First, the Apple Watch is a far, far greater threat to existing tech players than to Swiss watchmakers.

While foretelling a sea change in the luxury goods market and a second Quartz Crisis for the Swiss plays well in the mass media, the true competitive equation carries infinitely less sex appeal. Truth be told, the Apple Watch is a rival for the short attention spans of Fitbit, Nike Fuel, Jawbone, Google Glass, Garmin, Polar, and non-iPhone smartphone users.

I won’t call their like “devotees” because many gadget early-adopters tend to exhibit interest and commitment of inverse proportions. Calculator watches, “personal organizers,” Palm Pilots, and even the original Apple iPod had their moments before being buried alive under the next consumer electronics fad. The “fitness bracelet” represents the latest in the sequence of silicon shooting stars, and the Apple Watch is its natural successor.

Note the dearth of Rolex, Omega, Audemars Piguet, and Hublot products on that roster of tech burnouts.

Second, the base metal Apple Watch plays in the $350-$500 price range, so its overlap with true Swiss luxury watches amounts to zilch. While mechanical watches can and do retail in this price range, the vast majority of those amount to fashion timepieces selling to customers outside of the traditional luxury watch fold.

With even the most basic Rolex Air King listing for over $4,000, there is no clash of titans on the horizon to pit Geneva’s juggernaut against the galactico from Cupertino.

True, there’s an upcale 18-karat gold Apple Watch “Edition” on the horizon, but it’s likely to be more of a novelty and publicity product than a market threat. After all, there aren’t too many potential customers outside of Dubai who endorse the notion of wrapping $5,000 worth of gold case around $350 of imminent smartphone landfill.

After all, when was the last time you saw a functional first-gen iPhone?

Luxury watches are defined by exclusivity, enduring value, and exquisite craft content.

When a collector purchases a Jaeger-LeCoultre, he’s obtaining an heirloom-quality keepsake: a true companion for his lifetime and others to follow. The luxury watch is a rarity by necessity. Hand-wrought assembly, finishing, and mechanical tuning require time-consuming application by skilled professionals.

While the Apple Watch undoubtedly contains a great-deal of hand assembly, the Foxconn brand of manual labor is one that owners would prefer to leave unspoken.

The mechanical luxury watch has been obsolete as a utilitarian article since the quartz revolution of the early 1970s. Yet another new computer debut concerns Swiss watchmakers the way NASCAR worries the Kentucky thoroughbred industry. In other words, this is ships in the night/whale vs. elephant territory.

Finally, there is the matter of enduring value.

At The 1916 Company, we buy and sell vintage timepieces on a regular basis. We and our clients take it for granted that a well-maintained vintage Rolex, for example, is a “daily driver” and a lasting investment. Even late-model luxury watches from the last two decades already exhibit longevity unheard of in the tech sector. Be honest, tech junkies, how many decades-old computers do you use in your daily life?

Sure, I’m twisting the knife, but a vintage Breitling Navitimer with a circular slide rule might be the only 40-year old computer I’ve ever seen in action.

The takeaway is that a luxury watch purchased today (especially when purchased preowned after initial depreciation) will remain a valuable asset. That doesn’t happen with consumer electronics.

At first, the Apple Watch may depose a few Omega Speedmasters from the wrists of geek-chic early adopters, but will the cachet endure once every teenage part-timer at the local Burger King has the same “watch?”

There was a time when the iPhone commanded instant respect. Today, iPhones are about as remarkable as underpants; the only standout is the guy who does without.

But a Rolex always will be special, and a Rolex Submariner that steps aside for an Apple Watch’s wrist cameo is destined to reclaim its five-point crown once the novelty dies. Given the need to carry an iPhone in order to use the Apple Watch’s full features, the California company has engineered a way to prevent the WINO from cannibalizing iPhone sales, but this comes at the cost of a mandatory tech redundancy.

If you’re already carrying one electronic time reference/communication device, why not wear the Rolex for all the traditional reasons?

The Apple Watch is cool.

I know there’s been quite a bit of enthused talk around the office, and a couple of our tech-centric watch guys are likely to line up when the WINO goes on sale in Q1, 2015. But none of them plan to dump their Rolex, Panerai, or Omega...

… on second thought, maybe I’ve got this all wrong. The Apple Watch totally is the future, and luxury watches are dead. Out with the old and in with the new!

In fact, dear reader, I’ll buy you an Apple Watch in exchange for your painfully uncool Jaeger-LeCoultre Master Grande Memovox…