Once again, the Apple Watch beat most major watch companies in terms of revenue. And the funny thing is that we are not surprised by the fact that the Apple Watch outsold, Rolex, Omega, and other luxury watch markets. We are rather surprised that Rolex and Omega are still fighting this losing battle.
Apple Watch and Rolex
Let’s take a look at Rolex’s market. We could bet that almost every Rolex owner has an Apple Watch on the side. However, only a segment of the Apple Watch owners has a Rolex. Not surprisingly, for a lot of people, the amazing Apple Watch is their only. And if for some reason there were no smart watched they most definitely would not wear watches at all. It turns out, that we wear the Apple Watch because it is the best smart watch of its kind and it will probably be the last watch we ever own.
With that in mind, you can guess that Apple is very proud of its sales statistics. Of course, it is keeping a secret and won’t say much about the actual numbers. However, we can estimate that the Apple watch made $6 billion in revenue last year. At the same time, Rolex made $4.5 billion total in 2015. So, what is our take from this? Well, Apple got more on one product than Rolex made on its whole product line.
The lie of the luxury watch world
Let’s talk a little about the lie of the luxury watch world. There are, of course, a few specific and very expensive pieces, which cost a fortune. And expect those, most luxury watches that cost $2,000 or above are commodity products. Think about it: Rolex does not make $4.5 billion in revenue selling one or two watches. Even if its average watch costs $8,000, it still means that the company sold approximately 500,000 pieces. And that means that Rolex is at once not selling many pieces compared to any popular smart watch but is still selling more than enough to not rate as luxuriously unattainable.
It is a fact that luxury watch markets want customers to think that their products are sought after and are pretty difficult to find. And they sometimes even create false scarcity in some models just to prove that to us. But it is still clear that at the end of the day these companies are in the business of selling as many watches as possible.
It is true that a bit of extra work went into the manufacture and people with the skills necessary to build a piece of micro machinery so robust it can survive years, maybe decades. However, the watch industry did not do itself a favor when it ignored the quartz watch in the 1970s. And now it is desperately launching smart watches.
And what is so hard in beating Rolex, Omega or Cartier? Nothing: you just have to produce a better and at the same time cheaper product hoping that millions of people will want to use. The truly surprising part is that those big luxury watch companies are still considered the competition.