Nearly Bankrupted the Swiss Watch Industry


For anybody following the watch world intently, know the importance of the quartz disaster of the ’70s. This sequence of occasions led to the surprising upheaval of the Swiss watch trade. Slowly pushing long-time watch manufactures of mechanical and conventional watches out of the market, making them go bankrupt.

In brief, the rising digital giants of Asia, with their new digital know-how and very reasonably priced watches, shifted the stability of energy. Many individuals discovered themselves investing in Seiko, Citizen, and Casio watches.

And, on the similar time, started questioning the exorbitant costs of Swiss watches and their processes. However, because of the trouble of 1 man, the Swiss watch trade made its means again into the enterprise.

This article will discuss concerning the occasions previous to the quartz disaster, the consequence of the disaster, and the way the market formed itself after the disaster.

Swiss Market Dominance

Mechanical luxury men wrist watch with automatic winding, closeup fragment of deal, black and white

Before the Quartz trade took over the market within the Nineteen Seventies, the Swiss trade maintained dominance over the watch market ever for the reason that inception of watches and clocks. To this extent, the Swiss held over 50% of the market share. Swiss mechanical watches symbolized luxurious and wealth. There was a time when it was solely the royals and aristocrats who wore mechanical watches.

Given their excessive price of manufacturing and excessive value, the mechanical watches by no means made their option to most components of the world. Yet, these conventional watches had a significant flaw. Wearers needed to manually wind the watch, daily, on the similar time, to take care of its accuracy and precision.

To overcome this problem, watch engineers got here up with by the 1900s, additional growing their demand. As world wars broke out, all nations manufacturing watches shifted their focus to creating timekeeping units for the navy, purely catering for the struggle. However, this was not the case with Switzerland. Given their impartial standing amidst the struggle, Swiss was capable of proceed manufacturing client timepieces.

This inevitably led to different watch producers dropping management over the watch market. Resultantly, Switzerland not solely retained its market share however was additionally capable of achieve management over those misplaced by nations plagued with struggle. Leading to market domination, the Swiss watch trade thrived, making them some of the sought-after watches on the planet.

But, not earlier than lengthy, the Japanese watchmakers launched a timepiece utilizing digital motion and elements. This not solely broke the Swiss trade however set forth as a consequence of a brand new wave of revolution, generally generally known as the third industrial revolution.

Race to Build a Quartz Watch

First quartz wristwatch movement, used in the Seiko Astron, Caliber 35A, Nr. 00234, Seiko, Japan, 1969 (German Clock Museum, Inv. 2010-006)
Image Credit: Museumsfoto through Creative Commons

Although Seiko Astron began the quartz disaster, this was not the primary watch with a battery as a substitute of the winding spring utilized in mechanical watches. The honor, initially, goes to the Elgin watch firm, who in collaboration with a French firm designed a prototype. Many imagine that this prototype laid the groundwork for the quartz disaster to interrupt the trade. However, some stories present that quartz clocks existed way back to the Twenties, however have been extremely large. Because of this, these quartz clocks stayed inside these amenities.

Then, as we have a look at the ’50 and ’60s, main watch producers from Asia and Switzerland first competed to develop and manufacture quartz watches. In Asia, Seiko centered on constructing {an electrical} watch internet hosting the quartz motion. In the West, Centre Electronique Horloger (CEH), comprising 20 Swiss firms, bought collectively to undertake an identical job. History books have proven us who prevailed ultimately. The first-ever profitable transportable quartz clock, known as the Seiko Crystal Chronometer QC-951, debuted throughout the 1964 Tokyo Olympics.

Subsequently, each these teams, Seiko and CEH, unveiled their first-ever pocket quartz watch in 1966 throughout the Neuchâtel Observatory competitors, and their first-ever quartz wristwatch in 1967. The success of this occasion led to the introduction of the Seiko Astron in 1969. This timepiece formally marks the onset of the quartz revolution.

Seiko Astron

Quarzarmbanduhr Astron mit Cal. 35A, Seiko, Japan, 1969
Image Credit: Deutsches-uhrenmuseum through Creative Commons

After a decade of analysis and growth, in December 1969, Seiko launched the Astron to the world. Recorded in historical past as an achievement in digital innovations, the Astron is the world’s first analog wristwatch that includes the quartz motion. This invention bought 100 timepieces in only one week of its launch. To date, the Astron is a collectible by many watch fanatics.

In addition to the quartz motion, this timepiece got here geared up with a hybrid built-in circuit and a small stepping motor for the rotation of the palms. With a battery life lasting over one yr, the Astron was correct as much as 5 seconds per thirty days. Designed with a brushed dial end in a gold case with a leather-based strap, the Astron appeared as elegant as a standard watch. However, costs at $1250 USD then, the primary Astron was as costly as a mechanical watch.

Thanks to Seiko’s enterprise technique of low-cost mass manufacturing in a low-cost nation, the next value of the Astron fell drastically. Thereby, rewriting the narrative that cheaper watches are correct and dependable over costly watches.

With fewer components and new innovations changing conventional elements, the Astron was strong, cost-effective, and most of all, extraordinarily sturdy. As a outcome, the variety of Swiss watch producers dwindled to lower than 50% from the time interval of the ’70s and ’80s, and unemployment ranges solely doubled. This was the disaster that took over the Swiss watch world.

Slowly, the quartz watches started taking up the worldwide market, consuming into the Swiss’s market area as they misplaced their foothold. As we famous above, the Swiss weren’t oblivious to the rise in quartz. More so, they raced to develop the primary quartz watch, however Seiko finally received the race.

Swiss Beta 21 motion

Omega Electroquartz date and non date movements rear
Image Credit: Omega-collector through Creative Commons

As the years progressed, the quartz know-how solely bought higher. The elements we discover in a quartz watch as we speak are usually not the identical as what featured within the Astron. Many quartz watches hosted an LCD or LED show versus the everyday analog show. Not simply that, many Swiss watch manufacturers started making an attempt their palms with quartz watches as effectively. The world’s first Swiss quartz wristwatch, launched on the Basel Fair in 1970, makes use of the Swiss Beta 21 motion.

At the time of introducing the Beta 21 motion, it broke the report for being extra correct than a mechanical watch. However, the large dimension of the motion and the comparatively faster-draining battery led to it fading away quickly. Despite not having a lot gross sales report for this watch, the Beta 21 motion lays the muse for future Swiss quartz watches within the years to return.

The dire consequence of the rise in quartz watches meant that conventional Swiss producers might now not compete on equal footing. The huge distinction in value, manufacturing price, and accuracy between the Swiss watches and the quartz watches have been as clear as day and evening. And, as with every new advancing know-how, the patron desire at all times shifts to one thing new and cheaper.

Swatch – Nicolas George Hayek

Swatch Skin classic showing the transparent case back.
Image Credit: Mk2010 through Creative Commons

This is when the Swiss banks approached the profitable businessman, Nicolas Hayek, to assist revive the dying trade. Known for his unbelievable enterprise methods, he performed an instrumental position in serving to the Swiss delight make an amazing comeback. The first job given to him was to liquidate ASUAG and SSIH – two watch producers. Consequently, he arrange the Swiss Corporation for Microelectronics and Watchmaking (SMH) in 1983.

He centered on designing high-quality merchandise in a high-cost nation like Switzerland. A method, polar reverse to what the Asian quartz manufactures used, helped create jobs beforehand misplaced to the quartz disaster. And, in doing so, he introduces a singular line of watches. By strongly advocating for retaining a rustic’s know-how inside the area, and never opening it to mass manufacturing in low-cost nations, Hayek helped preserve the Swiss supremacy of high quality and craftsmanship.

He then launched the model Swatch with a vibrant and colourful palette, daring designs, and unseen kinds. Moreover, these watches host quartz motion as effectively and priced at simply $40 a timepiece. He believed that Europeans and Americans will purchase regionally made watches over watches from Japan. And, this fueled his technique efficiently. The Swatch watches used plastic and silicone and comprised of fewer transferring components than a standard watch. This made it simple to fabricate them in massive portions and ship them worldwide. With over 300 new designs yearly, Swatch was on a tangent to reclaim historical past.

Upon the immense success of Swatch, Hayek started to amass many different watch manufacturers. These embrace Longines, Rado, Omega, and extra, all forming a part of the Swatch Group. Currently, the Swatch Group owns as shut as eighteen completely different producers and types.

Swiss watch trade restoration

Gradually, the Swatch manufactures have been capable of regain their misplaced market share. By straight competing with the Asian markets of their similar value vary, Hayek discovered a option to enter again into the sport. Thus, started the restoration of the Swiss watch trade. Coupled with Hayek’s unapologetic technique, helped him and Switzerland rise to the highest of the watch trade as soon as once more.

As the development in world markets tilted away from Asian items, Swiss conventional watchmakers started advertising and marketing mechanical watches as luxurious items. Focusing on beautiful craftsmanship, aesthetics, and sophistication, manufacturers like Rolex, Patek Philippe, Audemars Piguet, and Vacheron Constantin shifted to the high-end market. While most of those watches use a mechanical or computerized motion, some use a high-end quartz motion as effectively.

One can say that the quartz disaster helped in creating a brand new stability between conventional and trendy watches by competing on precision, accuracy, and efficiency. At the identical time, the decrease finish of the markets continued to promote low-cost high-quality precision quartz watches.

Current Swiss Watch Industry

The Movement that started it all, the ETA 2801
Image Credit: Micky Aldridge from Finland through Creative Commons

The final consequence of the quartz disaster enforced new market constructions. For the purchasers, this meant that watches weren’t a commodity of luxurious. It meant that everyone, regardless of the standing or wealth, had the precise to personal a watch. This created concord between mechanical, computerized, and quartz watches out there.

Traditional watchmakers, too, started producing quartz actions such because the ETA utilized in manufacturers like Omega and Breitling. Commonly generally known as tremendous quartz, the ETA actions include a 100% chronometer-certified ranking for precision and reliability. Eventually, Rolex launched its personal quartz motion as effectively. This stands as a testomony to the standard and accuracy of getting a quartz motion even in high-end luxurious watches.

Presently, the Swiss watch trade is on the pinnacle of its success. Selling over 21 billion Swiss Franc value of watches in 2018, the Swiss trade lengthy escaped its attainable extinction. For this motive, Nicolas Hayek will without end be an icon of the watch trade. His efforts introduced a dying trade again to life, gave jobs to hundreds of unemployed individuals within the ’70s, and helped preserve alive the standard watch experience as a prestigious section of the market.

Simply put, quartz watches are cost-effective and promise sturdiness. But, if you’re out there for a creative timepiece centering on aesthetics and hand-assembled watches, conventional watches are the best way to go.

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