Apple's (AAPL) new Series 3 Apple Watch is putting pressure on Swiss time piece makers in Wednesday morning trading, with Swatch (SWGAY) and Richemont (CFRUY) leading declines on the benchmark SMI in Zurich
Richemont, which owns the Cartier brand, shares were marked 1.43% lower in Switzerland to change hands at Sfr87.60, despite sales rising more than expected. Shares in the watchmaker have gained more than 10% over the past three months. Meanwhile, Swatch shares lost 2.5% in morning trading to Sfr72.90.
The Apple Watch Series 3, unveiled Tuesday at the company's blockbuster event in Cupertino, California, will be able to work independently of the iPhone with the capability to take and make calls, meaning you can now workout without a phone.
"Cellular capability will broaden interest at an additional $10/month through a carrier and could kick up even last quarter's 50% growth," UBS said in a Wednesday note. "It is amazing the amount of technology required to add LTE yet the footprint is size is the same as the Series 2."
The smartwatch will have 4G capabilities and will be about 70% faster than its predecessor. The $379 watch will also be able to stream music and have a renewed focus on fitness. The watch will feature an updated heart rate monitor.
"We can see the Watch gradually changing from a nice-to-have to eventually a must-have," UBS added.
Tim Cook has claimed Apple is now the world's leading watch vendor, putting pressure on Swiss manufacturers, which have been suffering from a long period of declining sales caused by the collapse of the Hong Kong market and fewer Chinese tourists traveling to Europe's luxury shopping centers.
Analysts have warned that the Apple Watch and other wearable technology is posing an increasing threat to the Swiss luxury sector - particularly the cheaper quartz-based potion of the iconic industry.
UBS said Apple Watch sales will pose more of a challenge to Swatch's mid-range models such as Tissot and Longines than the higher-priced time pieces from domestic rival Richemont.
Richemont said Wednesday ahead of its AGM that sales in the five months from April to August jumped 12% at constant currency, beating the expectations of a 10 rise. However, the company still hasn't replaced its chief watchmaker, who left in July after just four months as the head of Richemont's watch business.
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