The Swatch Group has long been the primary movement supplier to the majority of Swiss (and non-Swiss) watch manufacturers. These movements — essentially the guts of the watch — have powered 60 percent of the world’s watches in the past decade. That’s about to end.
WEKO, the Swiss competition commission, has required Swatch to supply these movements in order to ensure that watch prices wouldn’t rise stratospherically when manufacturers began making their own movements. Swatch, for example, owns the ETA movement brand, manufacturer of hundreds of thousands of movements per year. This new ruling will allow Swatch to reduce its manufacturing efforts and increase its R&D expenditure.
Why is this important? Well it means that Samsung, Sony, and the like are about to get a competitor. Because Swatch, one of the most popular watch brands, has an international foothold, it could, in theory, create smartwatches for the masses. While Swatch has traditionally had trouble making popular smartwatches and, in fact, has had trouble understanding consumer technology, Swatch could partner with technology providers to produce an interesting amalgam of old and new tech.
Obviously the Swiss watch industry is, shall we say, a bit old-fashioned and is facing quite a few tough competitors. However, given a bit of marketing savvy and some R&D investment the shackles holding the company to its many customers could soon be broken.