Smartwatches now more popular than Swiss watches, thanks to Apple

For the first time, smartwatch shipments have outpaced those of their luxury brethren, according to market research.

Swiss watchmakers face declining sales at the hands of these high-tech upstarts.

Lori Grunin/CNET

The venerable Swiss wristwatch industry may have a smartwatch problem.

Global shipments of smartwatches outpaced those of Swiss watches in the fourth quarter of 2015, according to figures released Thursday by market researcher Strategy Analytics. This marks the first time the wearable tech devices have overtaken their luxurious counterparts. Much of the credit goes to Apple, which the research firm says has dominated smartwatch sales since its release last April.

While the popularity of smartwatches has grown dramatically, consumer interest in Swiss watches has waned. That's largely due to reluctance on the part of the Swiss firms to embrace emerging wearable tech, which in addition to telling time lets wearers place calls, tackle email, and check their stocks and blood pressure.

Swiss watch shipments declined 5 percent in the fourth quarter compared with the same period in 2014, while smartwatch shipments rose 316 percent over the same time.

"The Swiss watch industry has been very slow to react to the development of smartwatches," Neil Mawston, executive director at Strategy Analytics, said in a statement. "The Swiss watch industry has been sticking its head in the sand and hoping smartwatches will go away."

The current predicament of the Swiss watch industry appears to fulfill a forecast reportedly made by Apple chief designer Jony Ive back in 2014. An unnamed source told the New York Times of Ive's prediction that the luxury watch market would find itself in "trouble" after the debut of the then-unannounced Apple Watch.

One watchmaker trying to buck the trend is Tag Heuer. In November, the Swiss maker of luxury timepieces released its Connected Watch, which is powered by Google's Android Wear operating system. But the 155-year-old company still accounted for just 1 percent of the global smartwatch market in the fourth quarter, far behind Apple's 63 percent and Samsung's 16 percent.

The Swiss may be able to make up ground in the next couple of years, if they produce more tech-oriented devices that grab the attention of consumers. Smartwatch unit sales are expected to jump from 30 million last year to 50 million this year and then to 66.7 million in 2017, market researcher Gartner said earlier this month. Much of that growth is due to the Apple Watch, which Gartner credited with "popularizing wearables as a lifestyle trend."

If Swiss watchmakers want a piece of that action, though, they need to step up their game. Tag Heuer's Connected Watch features a 1.6GHz dual-core Intel Atom processor and twice the memory featured on other Android Wear watches. However, it lacks features that have become standard on smartwatches, such as GPS to help monitor physical activity and near-field communications for making mobile payments.

The clock is ticking, Switzerland.

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