Wednesday, May 14, 2014

Is Rolex Working On SMART Watches?

Is Rolex Working On SMART Watches?

For some people, it is impossible to imagine Rolex ever coming out with a SMART Watch? But, wait a minute!?!; Rolex invented SMARTWatches back in the 1950s, with the advent of the Rolex Sport Tool Watches like the Rolex GMT, and the Submariner, not to mentioned the Rolex Datejust and Day-Date. So the obvious question is whether Rolex will ever introduce a modern Rolex SMART Watch?

So what exactly constitutes a SMARTWatch? It is hard to say, but the idea is that it is wearable technology, that provides the wearer with important interactive information about their world. It can monitor biological functions like your pulse, and measure athletic fitness, as well as run powerful Apps. Why are SMARTWatches so potentially significant? Think about the difference between an old fashioned Nokia or Motorola StarTAC phone you were likely rockin' ten years ago, and an iPhone 5 you might be using to read this article today! The old-fashioned phones only made phone calls and did not run Apps. Comparing a Motorola StarTAC to an iPhone 5, would be like the difference between the Flinstones and The Jetson's, but look at how much things have changed in just the last decade, and the rate of technological achievement is growing exponentially!

Buster Hein from Cult Of Mac published an article today titled "The iRolex is the manliest iWatch concept we've seen yet." This article featured the photo above along with the video below.

Naysayers will say things like "Rolex Will NEVER come out with a Rolex Smartwatch. Rolex only makes old-fashioned mechanical watches, and would never consider doing anything else." I would point out this is not true. Rolex was part of the consortium that developed the Quartz watch under the BETA 21 program in the mid 1960s, and Rolex made Quartz watches for decades. 

Also, assuming Rolex is still in business 50 years from today, will Rolex watches in 2064 only keep time with just an old-fashioned, archaic mechanical movements? or will they offer SMART features, like the ability to unlock and start your car, or home, or office? My best guess is that at some point Rolex will have to enter the SMART Watch game, but the real question is, has Rolex been working on SMART technology all along, and have chosen not to implement it until the right time? After all, Rolex's R&D prowess is second to none, so it will be fascinating to see how Rolex approaches the future of the category it essentially created.

Are Rolex and Apple On An Inevitable Collision Course?

California's economy is the 8th largest economy in the world with a Gross State Product of $2 Trillion. In other words if California was a Country and not a state, it would have the eighth largest economy in the world. Apple is one of the crowned jewels of Silicon Valley in Northern California, along with other technological powerhouses like Google and Facebook, in the San Francisco Bay Area. Apple has $160 Billion (Not 160 Million, but 160 Billion with a Capital "B" dollars) in liquid cash in their bank account, and it appears they are looking to add their 9th product, which will be the Apple iWatch platform. The question is that if Apple is really successful with the iWatch platform, could it damage Rolex marketshare? 

Conventional wisdom might suggest it would not, but if only ten years ago, somebody said that Apple would displace and decimate dominant SMARTPhone makers like Nokia and Sony Ericsson, Palm and Motorola, nobody would have thought it likely, but that is the reality of Apple's strategic design and marketing prowess. 

The Quartz Crisis

So what is really at stake potentially in this race for the SMARTWatch? It is hard to say exactly, but one thing is likely certain, and that is that Rolex is on a collision course with Apple, and what does this mean exactly? Well, as I previously mentioned a Swiss watch consortium named BETA 21, which included Rolex and Omega and Patek Philippe, along with many other manufactures, developed Quartz watch movement technology, but failed to figure out how to implement it effectively. 

Japanese manufactures including Seiko learned of this technological development and put all chips on red to rush to market with this technology. As a matter of fact, in 1964, Seiko become the official Olympic Games Timekeeper at the Tokyo Olympic Games using newly developed Sieko Quartz timing clocks. Four short hears later in 1968 Seiko successfully brought to market an electro-mechanical wrist watch, and in 1969, introduced the first commercially available Quartz watch, which featured the Calibre 35 movement. Many Japanese manufactures followed Seiko's lead, and the net result was that the Japanese watch manufactures achieved the equivalent of a Pearl Harbor bombing on Geneva, Switzerland. The result of which was that the Japanese destroyed and decimated two-thirds of the Swiss watch-making industry. 

Ironically at the time of this Japanese Swiss watchmaking decimation, Rolex was at the helm of Swiss watchmaking leadership under André Heiniger, and irocinally Rolex ended up being the key beneficiary of this watchmaking world war. This was likely due to the fact that Rolex founder, Hans Wilsdorf had so intelligently isolated Rolex's leadership position from the rest of the Swiss watch industry.

The difference between what happened in the late 1960s and early 1970s, and the upcoming watchmaking world war, is that now it is ironically the American's going after the Swiss watchmaking industry (with immense Chinese manufacturing capacity), and this time it's Apple with $160 Billion dollars in their war chest. I'm not saying Rolex or that the Swiss watchmaking industry should be shaking in their boots, at least not yet, but if anybody can upset Swiss watchmaking leadership it would be Apple, particularly if Apple can get everybody who has an iPhone today, to wear an iWatch.

Think about this for a minute; what percentage of people who wear Rolex watches today, carry and depend on iPhones? I rest my case.

So is this all a really big deal, or is it much ado about nothing? As they say, Time Will Tell, but one thing is for sure, it will be awfully interesting to see how things unfold in the future. recently published a fascinating story named "The Swiss Watch Industry Is Bankrupt" which was written by Jan Adriaanse, who is a Professor Of Turnaround Management affiliated with the Law School of Leiden University in The Netherlands. I very highly recommend reading Jan's article that explores the upcoming world war of SMARTWatches, and what exactly is at stake.

There is also another interesting article I recommend reading named "Swiss-based watchmaker Swatch anticipating Apple's market entry by fighting for 'iWatch' trademark."