The threat from disruptive technology in the luxury watches sector

According to a recent report by EXANE BNP Paribas, one should never under-estimate the power of disruptive technologies, an imminent threat especially for the watches sector. By comparison, the report highlights that mobile phone is the latest category to be entirely reshaped by new entrants on the back of disruptive technologies. Once mighty incumbents – Nokia, Motorola and Blackberry are now in the dust, trampled by Apple, Samsung, Google, and low-cost Chinese manufacturers on their way up.

Although e-Watches have been failing to impress, so far, this should not be taken for granted by watch-makers, especially in the luxury sector, being well known that consumers don’t buy watches only for practical use but also to make a lifestyle statement. That is why, Exane’s Luca Solca sees minimum risk for Richemont Group, which focuses almost exclusively on luxury watches and remains cautious when it comes to Swatch Group, given its higher exposure to the entry price-point market and potentially more exposed to the risk that e-Watches may also be cool at some point in the future.

Samsung Galaxy Gear smart watch