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
Error: Please check your email address.
Show Comments

Blog Posts

Why doing your job well is the key to innovation

The words ‘power company’ and ‘innovation’ probably don’t seem like a natural combination. In fact, when I first went for a marketing role with an electricity company, I semi-dreaded the work I thought I’d be doing.

Catherine Anderson

Head of marketing, Powershop Australia

The great unlearning: How brands can assist with the adoption of voice

Mainstream adoption of voice technology will be all about what consumers are learning not to do.

Ash Mustchin

Director, digital and experiences, Principals

Why getting intimate is key to creating a great customer experience

According to CMO’s State of the CMO 2017 research, 83 per cent of CMOs believe customer experience to be central to their role. An interesting stat considering few of us experience great brand experiences.

Pip Stocks

CEO and founder, BrandHook

'to lesson screen time'LOL someone needs a lesson on how to lessen typos.

Andrew Ward

Golden Circles invests in content play to drive brand purpose

Read more

Hey Nadia, interesting read. We have all read about what your chatbots should offer or have but haven't came across with anything about w...

Ashish K Jain

What not to do when building chatbots and voice-based brand interactions

Read more

There are some many other great solutions compared to the ones you listed here. Our clients left some of those and switched to MARA (getM...

Alexandru Rada

CMO's top 10 martech stories for the week - 9 June

Read more

Charming Shane. You know this is a public forum, right ?

Peter Strohkorb

​CMO Interview: Why aligning sales and marketing drives innovation at Konica Minolta

Read more

I agree customer intimacy is a great way of creating better customer experience. Especially in the Insurance and Financial industry. Her...

Jessicalopez1989

Why getting intimate is key to creating a great customer experience and optimising customer value

Read more

Latest Podcast

More podcasts

Sign in