Industry giant Swatch Group and other Swiss watchmakers have been put under the microscope in a probing report from corporate responsibility and sustainability experts at the University of Zurich.
The report, written by Dr Isabelle Schluep Campo and Dr Philipp Aerni claims that Swatch Group “looks ill-prepared” for the looming smartwatch revolution despite its “strong market position” and some efforts to make better use of information technology.
It says that CEO Nick Hayek seems to be “in denial” about the growing worldwide shift in consumer preferences in smartphones and has announced a “long-term share buy-back programme” to shore up the share price, which “he considers to be attached by speculators that do not value the strengths of the Swatch Group”.
“Nick Hayek publicly announced that he would not seek collaboration with one of the giants in information and communication technologies, since Swiss watches would not serve the same market like smartwatches,” the report continued.
“He argued that smartwatches are actually a hype that would eventually pass, ignoring the fact that the watch might indeed once become a complementary good of the smartphone.”
The report went on to say that when the Swatch Group decline in 2015, Hayek blamed external factors for the problems, such as the strong Swiss franc and weak demand in important export markets.
Yet, the losses in share value may have been more related to the fact that 8.1 million smartwatches have been shipped in the last quarter of 2015 alone, compared to 7.9 million watch units shipped out of Switzerland, the report claims.
But Swatch Group wasn’t the only company to be put under the spotlight in the probing report.
It claims that the “rapid increase in sales of smartwatches leads to the question whether the established Swiss players in the watch industry are innovating enough to keep up with disruptive technologies combining information technology with watchmaking.”