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Luxury Watchmakers Are Turning to Google to Save Them From Apple

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Aaron Pressman
Aaron Pressman
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Aaron Pressman
Aaron Pressman
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March 9, 2017, 10:08 AM ET
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Luxury watchmaker Movado says it signed on to use the latest version of Google’s Android Wear software for a new line of smartwatches coming in the fall. The initial five watch collection, starting at about $500, will debut at the Baselworld jewelry show in Switzerland later this month.

While executives at some high-end timepiece makers have derided the Apple Watch as a toy, Movado Group CEO Efraim Grinberg said in a statement that he was proud to add “the latest, cutting-edge technology platform” from Google to his company’s new line of smartwatches that will be “iconically Movado.”

Movado did not release pictures of the designs ahead of the Baselworld show, but said the smartwatch line will combine the traditional Movado (MOV) look for faces, backgrounds, and complications with modern software features like fitness tracking, phone alerts, and the Android Pay mobile wallet.

Two other brands owned by Movado—Tommy Hilfiger and Hugo Boss—will also adopt Android Wear for smartwatches coming later this year, the company added. Google’s 2.0 upgrade to its smartwatch software, which debuted last month, added improved fitness features, easier app loading, and access to the voice-controlled Google Assistant.

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The announcements come after Apple has taken the luxury watch world by storm with its smartwatch, even as the device is seen as struggling to break out in the consumer tech gadget market. Apple sold an estimated 22 million smartwatches over the past two years, according to IDC, bringing in about $400 to $500 each on average according to analyst estimates. The company doesn’t disclose actual sales.

That’s a drop in the bucket compared to the 3 billion smartphones worth about $1 trillion sold over the same period. But 22 million devices worth $10 billion or more ranks near the very top of the luxury watch charts. Exports of swiss watches, an industry proxy for the high-end market, totaled $21 billion last year. In January, Jean-Claude Biver, who runs LVMH’s watch brands such as Hublot and TAG Heuer, estimated that Apple had a 50% share by number of watches sold.

Apple has partnered with some luxury brands for its watches and watchbands—primarily Hermes—but none that are significant watchmakers on their own.

When Apple (AAPL) revolutionized the smartphone market with its first iPhone, some competitors laughed but others searched for the quickest way to catch up. For most, that meant partnering with Google (GOOGL) on phones to run Android software. The strategy worked brilliantly for Samsung, Xiaomi, and some others.

Now that Apple has its sights set on the watch market, Movado, LVMH, and some of the other big names are turning to the same playbook and looking to Google for help.

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