Peter Stas, CEO & Co-Founder, Frederique Constant in a chat with Hiren Kumar Bose elaborates on the future of connected watch, the new Hybrid Manufacture watch, the Alpina AlpinerX Outdoor Smartwatch, and others
Frederique Constant surprised the traditional watch industry by unveiling its horological smartwatch in 2015; this at a time when the industry was witnessing a downturn. This year you have followed it up with the 3.0 series Hybrid Manufacture. Tell us how the journey has been so far.
In 2015 we introduced our first smartwatches with quartz rate electronic calibre. The other specialty was the display of connected information with hands of a dial. Though these watches look traditional but are battery driven. Almost from the beginning, we had questions from our customers whether we would be able to integrate this new smartwatch technology into a mechanical calibre. We worked on that for the past two and half years and then, at the beginning of this year, in February and later at Basel we introduced the Hybrid Manufacture. It is one of our own in-house developed, in-house produced and in-house assembled manufacture calibre and has smartwatch functionality, for example, step tracking, activity level, sleep monitoring, health insights etc.
Many then thought that it was a gamble but Frederique Constant and Alpina continue to impress the market with the sales of its smartwatches.
Apart from the Hybrid Manufacture, the mechanical smartwatch we also introduced the AlpinerX which is our third smartwatch with hands and digital display but still emphasizing a beautiful design. It still has a real dial, real indexes, real hands attributes of a typical Swiss-made watch. Our smartwatches represent around 12% of our revenue and we see this has compensated the slope of quartz watches. This shows that with this type of product the Swiss companies can come up with something that is still very Swiss in terms of DNA of a typical Swiss watch, yet having a beautiful design and with high quality.
Do you think the hybrid connected watch or smartwatch is just a wave or is it going to be long lasting?
The 3rd generation of Apple Watch has become quite successful. You can see it in the statistics, that three years ago there used to be still 21,5 million quartz Swiss watches exported every year and last year it dropped to 17 million, so over 4 million pieces in just 3 years and I think it is mainly due to smartwatches. Last quarter, last year Apple sold 8 million pieces while the entire Swiss watch industry sold 7 million pieces. Apple itself sold more than Swiss industry altogether. It is not just a wave and the ratio of smartwatches will increase overall in the watch market.
What has the volume of your sale of connected watches?
Around 12% of our revenue comes from the smartwatches and we see this has compensated the slope of quartz watches. Now, we produce 160,000 watches per year. We introduced Horological Smartwatches in 2015 because we saw the opportunity to add new features to quartz watches. With connected features, we have been able to make a watch much more interesting. For example, we can measure and give feedback on Activity and Sleep to the wearers of our smartwatches. Via their smartphones, they can see graphs of their data and receive Coaching too. All this was not possible in the past, but now it is! This is what makes smartwatches interesting.
On Kickstarter, Frederique Constant launched the new watch which contains five sensors and over a dozen functions. What has been the response to this watch?
The AlpinerX is powered by quintuple sensor technology. It has multiple sensors like UV, temperature, altitude, pressure, meter, motion and direction. Via the app, the user can select the functions. The Kickstarter campaign has been a big success as we sold more than 2795 watches and reached 1.5 million backing. This type of action shows the demand among customers for smartwatches.
How has Indian market responded to your smartwatch bouquet?
The response has been excellent as the Indian market is really much ahead in terms of e-commerce compared to many other markets worldwide. We have been present in the Indian market for several years now and the response to our smartwatch has been very positive. Last year we opened 10 new points-of-sales which bring us a total of 45 in India. This year, we plan to open another 10.