Wearables smothering Swiss watch business, Fossil CEO says

Fossil will start selling an Android Wear smartwatch in October or November, said CEO Kosta Kartsotis

Fossil's CEO is looking to make the company's traditional watches smarter by adding sensors to monitor a person's physical activities and sleep patterns.
Fossil's CEO is looking to make the company's traditional watches smarter by adding sensors to monitor a person's physical activities and sleep patterns.

Wearables are reducing interest in Swiss watches, with those highly regarded timepieces losing some of their luster as technology is incorporated into what people wear on their wrists.

"I think technology and the whole idea of wearables ... has taken some of the oxygen out of the Swiss business," Fossil CEO Kosta Kartsotis told analysts on a call to discuss the watch maker's second quarter results.

Without mentioning Apple or its smartwatch by name, Kartsotis implied the arrival of tech companies in the fashion world means the industry needs to incorporate technology into its products to stay trendy.

"We also see technology emerging as the latest trend in fashion, with the growing interest in wearable technology inspiring new entrants into the watch space," he said.

These new competitors, along with other factors like a strong US. dollar, contributed to Fossil's quarterly revenue decline, Kartsotis said. For the quarter ending July 4, Fossil recorded revenue of $US740 million versus $US773 million for the year-ago period.

The Apple Watch, meanwhile, went on sale during that time frame. Starting in April, the wearable could be ordered only from Apple's website before the company began carrying the watch in its stores in June.

It is unclear what impact smartwatches will have on the sale of analog timepieces. Some analysts predict that consumers are more inclined to purchase sensor-equipped devices that do more than tell time. Last week, a report from market research firm NPD Group claimed the Apple Watch was partially behind the largest slump in U.S. watch sales since 2008.

Fossil sees wearables as a key component of the industry's future and the company is developing three product categories around the technology.

First, there are smartwatches, like the Android Wear model Fossil is planning on launching in October or November, Kartsotis said. When Google announced its OS for wearables last March, Fossil was listed as a partner that would make watches running Android Wear.

Since then, not much has been heard about the effort. Fossil, though, has said development is taking longer than anticipated, and that the watch will include Intel sensors.

Kartsotis also predicted wearables will spawn a device category akin to jewelry, such as bracelets, which lack the displays found on smartwatches.

The final category, which Kartsotis labelled "smarter watches," will have the greatest long-term impact at Fossil. These devices will be existing analog watches with sensors added to perform functions like tracking activity and sleep, he said. Fossil is on track to release those watches this year, Kartsotis added.

Some day, every watch Fossil makes could have technology in it, he said.

In addition to meeting market demand, incorporating technology into its watches gives Fossil access to user data that can be fed into the company's CRM software and used for marketing efforts, Kartsotis said.

Fred O'Connor writes about IT careers and health IT for The IDG News Service. Follow Fred on Twitter at @fredjoconnor. Fred's e-mail address is fred_o'connor@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Undoubtedly, Robotic Process Automation enables marketing teams to accomplish repetitive tasks with fewer resources at a great accuracy.

Raj

What marketers need to know about robotic process automation

Read more

who wants to date me I am 9 years old and i am a boy

Jeremy Hawkins

Sink a sub gaming experience signals Subway's renewed brand push

Read more

Great read. I agree that it should be a perfect balance between interacting with your customers and knowing your brand. As a business, yo...

Caroline Scott

7 ways CMOs can improve their customer engagement game

Read more

Very true. Team development helps improve collaboration among the team members. I was able to improve my team's collaboration skills by t...

Quent Sinder

Why empowering others can help make you a great leader

Read more

CRM is a very good software that can help you succeed in your business. In my company, this system has allowed me to improve customer rel...

Anna Janicka

Sensis rebrands to Thryv and brings business software to Australian SMBs

Read more

Blog Posts

Attention marketers, it’s the small things that make a big difference

Marketers spend their careers searching for the formula that can improve the bottom line for their brands. Most new marketers also come into a role and feel like they need to put their own stamp on things.

Peter Pynta

CEO APAC, Neuro-Insight

Unboxing 101 - How savvy influencer engagement can build a brand

The humble unboxing video is a powerful tool. Correctly executed, it harnesses consumer fandom, viral authenticity and brand design magic to deliver a high-impact message to a tightly targeted cohort of consumers.

Gali Arnon

Chief marketing officer, Fiverr

​Power to the people

Purpose is the ultimate statement of intent for many organisations. Why are we here? What are we trying to achieve?

Rich Curtis

CEO, FutureBrand A/NZ

Sign in