The Next (Current?) Watch Crisis

No, I don't think mechanical watchmaking is going anywhere right now.  It's been turned into a jewelry item thanks to Rolex.  Despite the fact that anything computerized has a clock built into it, demand for watches is virtually higher than its ever been.  In the meantime, more and more companies are building their own movements in-house as it's become increasingly demanded.  Thanks to CAD, it's no longer as time consuming or expensive as it used to be to design a successful movement, and thanks to automated C&C machines, it's easier than ever to build them, provided you have the capital for the machines.

TL;DR: Mechanical watchmaking is in less danger now than at any time since quartz movements were introduced.

The Quartz Crisis, or the Quartz Revolution as Seiko more accurately calls it, was a three decade event beginning with the research of Hamilton and others into "electric" watches. It was not a monocausal event.  There were many problems that factored into the reshuffling of the market marketplace.

Contra to @jbird7986 's point about watch demand, I am reminded that Elgin sold more watches in the 1960's than in any other decade of their existence.  By 1968 they no longer could produce watches. Demand is only one part of the equation.

When I go to court, church, shopping, or anywhere in public in the last few years I am more aware than I ever have been about what people are wearing. I am not merely watch gawking, I am noting who is wearing a watch and who isn't.  Most people, men and women, wear a smartwatch or nothing at all.  This is more true the younger the person is. 

I was in high school when Swatches came out.  We all wore them.  When I started law school and working I had a watch.  We all did.  I am not ancient.  The Quartz Crisis did not seem like a crisis from my vantage point.  Watches were cheaper and more accurate.

This shift is of a different nature.  When a 25 year old reaches middle age will they buy watches in equal or greater numbers than folks like me do?  Not if they haven't habituated to wearing one. We are in the middle of something that will reshape the industry again, perhaps more impactfully than quartz.  I don't know what form that will take.  Perhaps, every watch in 2060 will be a SeikoRolex.

The crisis in a lot of ways is that , if one manages to obtain some of the sought after model, they are a target for theft and this can cause the owner to almost be anxious wearing them.

You beat me to the "squeezing the middle" point. I'm cribbing from the book Cheap: The High Cost of Discount Culture, but that effect happens when low cost entries appear. Manufacturers have to choose whether they are luxury or discount, and the middle ground of value disappears.

Modern Timex stepped up to stainless cases, mechanical movements, and scouring their back catalogs  because they felt pressure from below (ahem, inexpensive Chinese competition). I'm not entirely sure of the price range of modern smart watches, but I'm betting that they are staying studiously below them for their main movers.

I think the bulk of microbrands are in the price range of the average smart watch, and they are currently living or dying by their ability to produce innovative, stylish, or otherwise distinguished products. My gut says that a good majority or more will be gone and not replaced within a decade.

However, the mechanical (even quartz) watch market will be largely carried by enthusiasts as opposed to utilitarian consumers. Fountain pens have been "obsolete" for almos twice as long as mechanical watches, but a wide cornucopia of makers thrive. I can't make any mathematical model but the multiple purchases by enthusiasts somewhat offset the single necessity purchase of a "normal" consumer.

Our three closest Targets no longer sell watches, except for really cheap but colorful "Smart Watches" in "Electronics."  Zilch in "Jewelry."  Two of the stores managers were on site.  I asked why their formerly fairly large watch selections had disappeared.  They explained that store space has to be allocated by sales. "Showing me their bare wrists, one asked  "Who wears a watch these days?" and the other asked "Why do you ask?" as he displayed his "mobile device."

Yes it is true that smart watches are becoming the norm but don't discount peoples' need to flex. This naturally leads to established watch makers moving up market where margin can be protected and the competing points are on brand, heritage, and exclusivity versus commoditized complications... a trend which many industry reports confirm. 

Watches are Toolry. They used to be valued tools that are now jewelry.  The good news is IMO for every status symbol blinger on wrist there are thousands of people who wear a watch for some sense of their personality and/or appreciation for the tiny little machines they are (that'd be us watch nerds) . Jewelry at all price points and styles like tow rings to earrings 

I started with seiko 5, move to G shock squares, and now i'm exclusively smartwatch dude. For me, smartwatches are revolutiom, not crises.

Apathy

It's graduation season, and I attended two graduation parties last weekend. I saw one mechanical watch on a woman in her 50s. Some smartwatches, but not many. 

Even for something to survive as a collector's item or status symbol, it needs to be somewhat relatable to the life experience of the general population.

Among their graduates and their friends, I did not see s single watch, smart or not.

It depends on the circles you run in whether people wear watches, office dwellers might be abandoning them apart from as jewellery, but not everybody is an office dweller. There are lots of jobs that require people to know the time, but are too rough/dirty for carrying a phone. Those are the kinds of places people still wear watches daily. 

Watch companies that exist at the working class end of the spectrum, and at the jewellery end of the spectrum are pretty safe long term. 

I suspect smart watches may be like iPods, a useful object for a time, but not something that endures for decades. Right now smartwatches are a slight convenience, and a status symbol. 

Yes, in the last couple years I've witnessed the decline of space and variety (and quality) for watches in department and big box stores. And they're not lying about demand, as I was typically happy to see that any Walmart or Target had multiples of the Timex that's probably been discontinued for several years, NOS NIB. But then one day all the Timex models were gone, barely supplanted with bottom rung private label stuff.

The local access issue is one similar to those seeking quality tailoring or non-disposable shoes. Going back not so many decades, outside of total wasteland, these things were just there, in town or one over. Now that's been deemed a haute and rarified luxury so most require a trip to a major city for such things. 

We're already seeing this with Rolex. In the 90's I remember my early 20's friend just walking into a suburban mall jeweler and trying on various Rolex models. We know that's not happening now. I wouldn't be surprised to see other luxo brands follow suit.

There is a generational delay to this. I'm late middle age but grew up in a world where quartz was just the standard, the default. I knew nothing else, and it was an old-fashioned thing that had to be explained and was almost unfathomable. Thus it will be for for children born since a decade ago with smart watches. But the stragglers, laggards, and holdouts (us here) will go out with a whimper, not a bang.

The only other comparison is the demise of the pocket watch. They were the standard, had been for decades, then innovation came and an asymptotic decay in usage occurred. 

Sure, there will be niches, but I would expect current smartwatches to integrate with specific functions. The fitness tracker will surely be around, and so will be a G-Shock equivalent. But I doubt the general public will continue to wear watches that are not tied to a particular purpose. Eventually the status symbol will also fade, as it loses the context which made it relevant.

My children and stepchildren range from thirty four down to fifteen. None of them wear a watch.

My step son who is seventeen wore a Citizen quartz briefly ( a blingy shopping mall type piece) that needed a battery replacement so didn't even work. He wasn't interested in me fixing it as he only wore it " as jewellery ". 

Since I started collecting my son who is sixteen has displayed slight interest and I'm planning to buy him a mechanical watch for his next birthday. To try and ignite a spark. Wish me luck!

I kinda hope watch manufacturers are thinking as much about the future as the present, because the trends seem both obvious and slightly ominous. It may sound too dorky now, but we're headed towards a world where the smart watch, potentially with the addition of augmented eyeglasses and/or ear buds, replaces smart phones. Apple surely sees this, just like they had the foresight to realize that the iPhone would eventually replace iPods.

Smart watch adoption is still relatively low worldwide. (Though I have seen credible data that suggests almost 1/3 of US iPhone users wear an Apple Watch.) But once smart watches replace smart phones, they will become almost universal.

See, that's kind of the problem. 20+ years ago, nearly every adult wore a watch. Now, its very hit or miss. 

For his HS graduation, I gifted my nephew an automatic I wasn't wearing. His face lit up. His parents were impressed. His brother was awed. 

My kid begged me to give him a cheap quartz I had. 

I now plan on giving my all my nieces/nephews/grandchildren a watch for graduation.

There's a generalized slump in luxury right now but from what I've seen watches are slumping less.  You'll probably see some independents and low volume brands in the larger groups that will really really struggle and perhaps not make it.  The big dogs aren't going anywhere.

when others expect your communication device to literally never leave your person,

Ah, but you have agency here and can, to some extent, set expectations.

To use myself as an example, I don't generally respond to messages while I'm away from home, even if I have my phone with me. My wife has, in the past, complained ("didn't you get my text?") but she now accepts that behavior. (Some might say she's a saint for doing so.)

On the other hand, I suspect that though we two agree on the benefit of "unplugging" temporarily, we should also recognize that we're in the minority. My daughter, for example, can't understand why I don't want to be in constant communication with the entire world.

Both - too much choice, or just the same reissues again and again for consumers, and just bland content, coverage and reviews.

Read a really good article a couple weeks back  that claimed, with lots of evidence, that the so-called quartz crisis wasn’t due to the Swiss watch industry’s lack of adaptability, but more due to the Swiss government’s attempts to control the value of the franc and artificiality attempt to prop up an industry that needed a correction.

If you were arrested today for a crime and the government wanted to track your location on a specific date, there is no setting on a smart watch or phone that would prevent them from getting incredibly accurate information about the devices' locations and paths of travel.  They further could get the time and location of every social media post, call, missed call, message, and picture on the device.

There are license plate readers in every major city.  There are traffic cameras, toll cameras and all sorts of CCTV.

We only learn of this information when the arrest is made.  Do you think that this information exists and is collected outside of the criminal process? I do. I have seen too much of it.  I have seen the government hide it.

I have never had an Alexa or similar device.  I have never had a smart watch.  Occasionally, I would like to go to Walden Pond and be left alone.

Occasionally? If I could figure out a way to make that permanent... 

Hmmmm, that would be really interesting to read; because on the face of it, they don't really seem connected. 

Oh, I know, but you know how bosses & others can be. 

As far as the constant communication with the world bit, all the news of all the stupid shit we do to each other, I can't cope with it. I have to have breaks and they are getting more frequent and longer in duration. 

I really appreciate WC so far in that we just discuss watches and all the other stuff is not here, or if it is, it's WAAAAAAY out on the periphery. 

The big dogs managed to survive the Quartz Revolution (and by all accounts, it was a near thing that some did not), so I don't expect them to go anywhere. 

This is more about all the smaller ones and the options that will be available to the regular people. 

Our local "Super" Walmart has not gotten a new Casio in for at least six months.  All the new stock trickling in are uber cheepo "George" models.    Its "jewelry" department is unmanned as part of their workforce reduction plan that is doing away with cashiers.

I would think it would be the mid to low end that would be hurt this time around. Rolex is doing just fine selling nice watches to people who morsy want something everybody will know they paid a ton for. That may abate to a degree, but newly rich folks will always want to flex. But as you point out, regular folks mostly aren’t wearing anything but smart watches. 

Market saturation is a problem these days

so many brands, more by the day, who will endure? My guess is the big boys and the low end boys, the mid tier will be where the fiercest fighting is. I agree with a comment about watches used to be tools to tell the time and are now jewellery or fashion statement. I’m not bothered, if I can still get them that will do for me.

That's the thing: what will the little people be able to get? Nice quartz? Crappy mechanical? Crappy quartz?

I have 3 automatic mechanical watches, none of which could be considered luxury. I want one luxury mechanical watch. Based on what I'm reading & viewing, the best mechanical watches are the newer watches from the giants (tech advances, finished well & pricy) or from the late 60's/early 70's (better materials, better finishing throughout the movements, but you just never know what you are getting when buying vintage). 

The argument is that until the quartz crisis (revolution), watch companies cared most about making a quality product, figuring profits would take care of themselves. So as a percentage, more watches produced during that lead in to the quartz crisis (revolution) were better quality. Now the product's quality is factored against profitability & corners are cut wherever possible, rather than focusing on making a great watch. 

So what I'm afraid of I guess is that the watches I'll be able to afford will not be THE watch I want to own.