All speculations and rumors regarding Apple (NASDAQ:AAPL) working on a smartwatch get answered by one move that the Cupertino giant made. It recently poached a top executive from the premium watch industry. It’s no more a hush hush now. In an interview with CNBC Jean-Claude Biver, the top boss of LVMH's luxury-watch division that includes TAG Heuer and Hublot said “Our sales director left yesterday because he took a contract from Apple to launch the iWatch.”
Biver did not identify the executive. But according to 9to5Mac sources, Apple has hired TAG Heuer's vice president of sales and retail Patrick Pruniaux to make further advancement in iWatch which is expected to release this fall. Instead of getting worried about the fate of the company after one of its lead sales executive has been poached, Biver is rather taking pride that the company has executive who are eyed by outsiders. He said that had it been a “direct competitor”, it would have accounted for betrayal, but since it is Apple, “a great experience for him.”
- Warning! GuruFocus has detected 8 Warning Signs with AAPL. Click here to check it out.
- AAPL 15-Year Financial Data
- The intrinsic value of AAPL
- Peter Lynch Chart of AAPL
No Doubts about the iWatch Release
There have been months of speculations and talks regarding the debut of a wearable device, a smartwatch, from Apple. Every time the tech major’s been approached for a comment on this, it has declined to speak on or make any sort of confirmation on such guesswork.
But after taking on board one of the top executives from the luxury watch industry, there no denying that the iWatch is on the way this October. Pruniaux has been with Tag Heuer for around seven years. The executive is expected to help Apple with the release of the iWatch that’s going to hit the stores this autumn. Apple has snapped several executives from this luxury segment in the recent past, signaling that the company is working to make it big with the iWatch. Yves Saint Laurent Paul Deneve, a former executive of French fashion brand was appointed by Apple last year for a special project.
Samsung (SSNLF) has already made a move in wearable devices with its Galaxy Gear, which hasn’t really appealed to the masses. But huge hopes are tied to the Cupertino hero. A decade ago, Apple completely revolutionized the way people listened to music by introducing the iPod and wiped of Sony (NYSE:SNE) Walkman’s existence. The same could happen with the iWatch destroying the market of Galaxy Gear.
Early last week a patent official said that Apple has applied to get a trademark for its smartwatch, which again suggests that the iPad maker is working on the wearable device. It is also said that the iPhone maker would integrate health and fitness feature in the iWatch that would capture and interpret health data and related issues of the user.
A Threat to Swiss Watches?
There are some who believe that the Watch could be a stiff competition for the luxury Swiss watches and hurt its market segment drastically. But industry analysts believe that the iWatch has a different target audience that doesn’t much coincide with the target audience of the luxury watch segments. Though both target the elite class, the purpose that an iWatch would serve would be different from a Swiss watch. An analyst Kepler Cheuvreux in Zurich said, “I don't believe that an iWatch will be a threat to luxury Swiss watches.”
However, only a small segment with price points lower than $1,000 might feel a slight pinch, assuming that the iWatch would be within this range. But otherwise, smartwatches aren’t a replacement of luxury watches. Smartwatches are more of a consumer electronic device that will undergo fast technological changes every year, at least in the first few years of its launch, unless a point comes when upgrades would be minor. Also, the longevity of an iWatch cannot be compared with luxury watches that go on for years.
Developments as these suggest Apple’s wristwatch is nearing its launch. It’s been a long wait for Apple enthusiasts who go crazy about any device coming from the tech major. Apple’s always been very particular, and tries to be as close to perfection as possible when offering a new product. It takes its time to develop the device, but ensures that the best comes out. It would be interesting to see how the tech giant integrates fashion and fitness with technology.