Part of a series on Smartwatches' possible impact, notably the AppleWatch, on the swiss watch industry. If Apple to built their watch in Switzerland, it would become immediately the biggest swiss watch brand by volume and value, and it would add significantly and material to the swiss GDP.

1. 11/11/2014 Could a ‘Swiss made’ iWatch alone add 1%-point of GDP to Switzerland? | Transformation Hydraulics
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THOUGHTS ON BUSINESS STRATEGY, AND HOW TO MAKE IT
WORK. BY NICOLAS SCHOBINGER.
Could a ‘Swiss made’ iWatch alone add 1%-
point of GDP to Switzerland?
2
iWatch, Apple’s highly anticipated new smart watch is expected to be
launched with much fanfare later this year. Assuming the iWatch would
carry a ‘Swiss made’ label and it would ship after final assembly from
Switzerland, what would this mean for Switzerland and its
watchmaking Industry?
I think it would be VERY transformative to Switzerland:
Jul
12
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2. 11/11/2014 Could a ‘Swiss made’ iWatch alone add 1%-point of GDP to Switzerland? | Transformation Hydraulics
Apple would become the leading Swiss watch brand
Swiss watch exports would more than double in volume
Swiss GDP could get up to 1%­point
growth on top
These impacts are based on 33.5 million iWatches to be sold, at 250
USD average sales price, and thus 8.4 billion USD revenue to be
generated in the first year. I took the average assumption from
financial analysts, in that case from BMO Capital Markets (for a good
summary of UBS, Morgan Stanley, BMO Capital Markets see here).
In comparison, Swiss watch exports were approx 23 bUSD (20.6 bCHF)
and 28 million units. Such statistics are sometimes skewed (re­exports,
no domestic consumption, etc), but it is a good indication and
it’s official data (see Federation of the Swiss Watch Industry below). So
a ‘Swiss made’ iWatch would lead to that statistics to grow 2.2x in
volume and 1.3x in value – in one year.
The three biggest Swiss watch houses are Richemont (IWC, Cartier,
Montblanc, Piaget, Jaegere­LeCoultre,
Panarei, Vacheron­Constantin,
…) with revenues around 14.5 bUSD, the Swatch­Group
(Swatch,
Breguet, Omega, Tissot, Rado, Blancpain, …) with 9 bUSD, and Rolex
with 5.5 bUSD. I took this from second sources, as the industry is very
secretive on revenues. Most companies do not publish official data..
Apple would, with 8.4 bUSD and just ONE brand, be the leading Swiss
watch brand.
The swiss GDP was, according to the World Bank, 651 bUSD in 2013.
This was a 3.1% growth based on current USD. Adding a fictive 8.4
bUSD from the iWatch, you get an incremental GDP growth of 1.3%­point.
As the iWatch would typically be shipped to retail subsidiaries
based on transfer prices (not the retail prices), this impact would be
lower – to be very conservative, lets say just a ⅓ of this amount. You
still get close to 0.5%­points
of incremental GDP­growth.
And one can
easily imagine that sales in the second year would double. So yes, a
‘Swiss­made’
iWatch would add 1%­point
of GDP. Again, this would
be BIG news for a launch year.
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3. 11/11/2014 Could a ‘Swiss made’ iWatch alone add 1%-point of GDP to Switzerland? | Transformation Hydraulics
‘Swiss made’ iWatches would certainly have a material impact also on
other dimensions. Take the labour market for instance, and what it
implies in terms of time to make the necessary workforce available, as
well as the absolute numbers needed. Or take manufacturing
innovations in automation, robotics or advanced materials needed to
cope with high costs of Switzerland or with the sophisticated design.
Although already well addressed by established watch­makers
(e.g
Swatch, Rado, Rolex, Eta), I assume the iWatch would push
innovations in manufacturing even further. Faster.
Taken together, this sounds like a massive opportunity for a whole
country. The scale and the pace alone, is already staggering.
Truly transformative.
Copyright 2014 Nicolas Schobinger. All Rights Reserved.
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Tagged Apple Watch, swiss made
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Can the iWatch
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In Smart
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