Swatch Group AG shares plummeted by 3.2 per cent today. This news has been revealed due to the watchmaker currently facing more competition since the unveil of the new Apple Watch. The new watch is predicted to be able to make calls and send messages without requiring a mobile phone.
Apple unveiled Series 3 of its smartwatch just yesterday, with the news already having an effect on other watchmakers. Prices start at $329 for Apple’s new watch, and Swatch shares have dropped as low as 377.3 today.
“The fact the new watch is untethered from the phone has the potential to be a game changer,” said Jon Cox, an analyst at Kepler Cheuvreux. “It is a fight for wrist real estate and superb functionality versus a simple quartz watch. In many cases the quartz watch is going to lose.”
The California-designed smartwatch is eating into the market share of lower and mid-range watches, having an increasing effect on the industry. Meanwhile high-end mechanical timepieces have been left unscathed, said Rene Weber, an analyst at Bank Vontobel.
“Far from being a flash in the pan, smartwatches are bound to stay and continue to upgrade their functionality -- the recently announced new Apple Watch is a case in point,” said Luca Solca, an analyst at Exane BNP Paribas.
Other companies which have been hit hard by new competition from smartwatches include Swiss watchmaker Movado Group Inc. Also, the fitness brand producer Fitbit Inc, and Fossil Group Inc have been hit directly.
Richemont, a brand which commands higher prices, fell 1.5 per cent as it reported a gain in sales in the first five months of its fiscal year. This was unveiled today.
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