Watches can be smart or high end. But can they be smart and high end?
Luxury giant LVMH is asking a question that’s becoming more and more relevant as the luxury sector picks up, and the trend towards a connected world continues: is there a market for luxury smartwatches?
When Apple Watch was released, digital pundits were quick to declare traditional watches obsolete. Then, when this didn’t come to pass, those same pundits declared Apple Watch a failure. A more nuanced view, which seems self-evident years later, is that Apple Watch could have been amongst the first generation of what will one day become a – but not necessarily the – major trend in timepieces.
LVMH’s share price has edged up by 3% over the month
SOURCE: Yahoo Finance
LVMH-owned watchmaker TAG Heuer was the first mover in the luxury smartwatch space. The Swiss watch brand took the fight to the upper-end of Apple’s customer base with a $1,500 smartwatch in 2015 that boasted design collaborations with Google and Intel.
And while lack of interest forced Apple to discontinue its $17,000 gold version a year after it debuted, TAG has gone on to demonstrate what a special edition smartwatch really looks like. The $200,000 diamond-encrusted TAG Heuer Connected is a five-piece limited run series that, to date, is the world’s most expensive smartwatch.
Now, another of LVMH’s brands will be adding to the nascent luxury smartwatch market. Hublot is introducing a $5,200 piece, which was unveiled yesterday at the Baselworld trade fair.
The company is keeping numbers low to maintain exclusivity, and Jean-Claude Biver, LVMH’s head of watches, calls it “a unique one-shot.” Hublot is hoping that this run, which will cap production at 2,018 pieces, will act as a tester for more expensive pieces. According to Biver “it will be a collectors watch in 20 years.”
Perhaps what observers got wrong about the Apple Watch was to think that a technology company with no experience in watch making could oust the old masters. Apple certainly disrupted the space, but disruption and ownership are not the same thing. For now, with sales of Swiss watches recovering and legacy brands moving into the connected world, it seems like everything’s still up for grabs.
Dominion holds LVMH in its Global Trends Luxury Fund.
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