Sales since 2014 however, have been declining.\u00a0 Most industry insiders credit the Apple Watch for much of the shift (announced in 2014; started selling in 2015).[4]<\/a>\u00a0 The advent of the Apple Watch and the smartwatch industry illustrates a new challenge to traditional watch brands, and TAG Heuer\u2019s (\u201cTAG\u201d) response\u00a0is the TAG Heuer Connected Smartwatch (\u201cTAG Smart\u201d). \u00a0TAG Smart is a smartwatch with\u00a0the look and body of\u00a0a traditional TAG Carrera mechanical watch. \u00a0However, it has a computer, instead of a mechanical movement, to power it and a round digital screen, instead of a traditional dial, to display information.<\/p>\n TAG, currently owned by LVMH, was formed through the acquisition of Heuer, a watchmaker established in 1860, by TAG, a high-tech manufacturer, in 1985.[5]<\/a>\u00a0 The advent of quartz damaged TAG temporarily, as the industry\u2019s equilibrium shifted to include electronic watches.\u00a0 But as mechanical watches regained popularity, particularly at premium price points, TAG benefited from the growth as one of the few remaining, prestigious brands.<\/p>\n The history of the smartwatch is filled with numerous hit or miss products, ranging from the Seiko Receptor in 1990 to the Microsoft SPOT in 2004.[6]<\/a>\u00a0 These watches were tools and meant to convey information rather than be worn for fashion.\u00a0 The newest generation of smartwatches on the other hand, are not only functional, but attractive.\u00a0 Industry pundits claimed that premium brands, such as TAG, would be relatively immune from these new smartwatches due to their different price points and target market.\u00a0 The Apple Watch for example, retails for as low as $269, whereas TAG\u2019s cheapest men\u2019s mechanical watch retails for $1,000.[7]<\/a>\u00a0 Lower end watches made by Fossil\/Michael Kors have indeed suffered materially since the release of the Apple Watch, but Swiss premium watches are starting to feel the pain as well. [8]<\/a>,[9]<\/a><\/p>\n In general, the TAG Smart has been well received, or at the very least, begrudgingly accepted by the premium watch community as an inevitability.\u00a0 Credited, in part, for the watch\u2019s success is TAG\u2019s commitment to sell the mechanical version of the TAG Smart at a discount should the buyer be disappointed.\u00a0 Much like Tesla did for cars, TAG Smart is trying to become an accepted industry alternative in the premium Swiss watch market.\u00a0 Looking forward, smartwatches will most likely redefine the watch industry\u2019s equilibrium, and if TAG is to weather this storm as it did the quartz crisis, it needs to keep innovating.<\/p>\n The Android powered TAG Smart is decent, but issues such as battery life, variety of applications and phone connectivity need to be improved if they are to appeal to Apple Watch enthusiasts.\u00a0 Furthermore, I would suggest that TAG investigate other approaches to dealing with smart technology in watches.\u00a0 For example, a company called Chronos makes smart buttons that attach to the bottoms of mechanical watches and provide the same data to a smartphone as smartwatches.[10]<\/a>\u00a0 Other companies are instead adding wearable tech to watch bands, effectively adding smart capabilities to any mechanical watch.[11]<\/a>\u00a0 These seem like happy middle-grounds to mechanically minded purchasers who still want some tech.\u00a0 Thinking ahead, TAG might consider investing in hybrid mechanical technology.\u00a0 This would be a mechanical watch that powers a digital\/smartwatch output.[12]<\/a><\/p>\n TAG should also consider doing something similar to BMW and its \u201ci\u201d line of electric\/hybrid vehicles, and create a new brand for its smartwatch line.\u00a0 This sub-brand would allow TAG to retain its storied heritage for its mechanical watch line and then create a new exciting brand for technology focused\u00a0buyers.\u00a0 Delineating this initiative would be\u00a0important to establish TAG as both a traditionalist and a forward-thinking company.\u00a0 Doing so will hopefully help TAG retain its current customer base while it steals potential customers from Apple.<\/p>\n Regardless of what TAG decides to do, keeping to the status quo\u00a0and ignoring change will most likely lead to TAG\u2019s demise.\u00a0 TAG Smart is a step in the right direction, but further innovation will be necessary for TAG to avoid the already massive watch brand graveyard.<\/p>\n (765 words)<\/p>\n [1]<\/a> Anthony Young, January 1, 1999, \u201cMarkets in Time: The Rise, Fall, and Revival of Swiss Watchmaking,\u201d Foundation for Economic Education<\/em>, https:\/\/fee.org\/articles\/markets-in-time-the-rise-fall-and-revival-of-swiss-watchmaking\/, accessed November 2016.<\/p>\n [2]<\/a> Ben Newport-Foster, June 15, 2016, \u201cThe Real Impact of The Quartz Crisis,\u201d Timepiece Chronicle, <\/em>http:\/\/www.timepiecechronicle.com\/features\/2016\/6\/14\/the-real-impact-of-the-quartz-crisis, accessed November 2016.<\/p>\n [3]<\/a> Federation of the Swiss Watch Industry FH, October 2016, \u201cSwiss watch exports: World January -September 2016,\u201d http:\/\/www.fhs.swiss\/scripts\/getstat.php?file=a_160109_a.pdf, accessed November 2016.<\/p>\n [4]<\/a> Note: the explosion of vintage watch sales is also credited as shifting downward the sales of new watches.<\/p>\n [5]<\/a> Monochrome, April 29, 2015, \u201c10 Things to Know about TAG Heuer,\u201d https:\/\/monochrome-watches.com\/10-things-to-know-about-tag-heuer-watchtime-wednesday\/, accessed November 2016.<\/p>\n [6]<\/a> Gary Marshall, April 17, 2015, \u201cBefore Apple Watch: the timely history of the smartwatch,\u201d Techradar<\/em>, http:\/\/www.techradar.com\/news\/wearables\/before-iwatch-the-timely-history-of-the-smartwatch-1176685, accessed November 2016.<\/p>\n [7]<\/a> Watch prices online, https:\/\/shop-us.tagheuer.com\/en\/tag-heuer-formula-1-200-m-41-mm.html, http:\/\/www.apple.com\/shop\/buy-watch\/apple-watch.<\/p>\n [8]<\/a> Federation of the Swiss Watch Industry FH, September 2016, \u201cFifteenth month of falling exports,\u201d http:\/\/www.fhs.swiss\/file\/59\/comm_160909_a.pdf, accessed November 2016.<\/p>\n [9]<\/a> Hayley Peterson, May 27, 2015, \u201cThe Apple Watch might be killing Michael Kors,\u201d http:\/\/www.businessinsider.com\/apple-watch-could-crush-michael-kors-2015-5, accessed November 2016.<\/p>\n [10]<\/a> Jack Forster, \u201cChronos, The Wearable Smart Disc That Wants To Turn Your Watch Into A Smartwatch,\u201d Hodinkee<\/em>, November 12, 2015, https:\/\/www.hodinkee.com\/articles\/chronos-the-wearable-smart-disc-that-wants-to-turn-your-watch-into-a-smartwatch<\/a>, accessed November 2016.<\/p>\n [11]<\/a> Hodinkee, January 1, 2015, \u201cIntroducing The Montblanc Timewalker Urban Speed E-Strap: The First Foray Into Digital Wearables From A Traditional Luxury Player Is Upon Us,\u201d https:\/\/www.hodinkee.com\/articles\/introducing-the-montblanc-timewalker-urban-speed-e-strap-the-first-foray-into-digital-wearables-is-upon-us<\/a>, accessed November 2016.<\/p>\n![\"tag-specs-2\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/TAG-SPECS-2-300x193.jpg\")
<\/a>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0![\"tag-specs-3\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/TAG-SPECS-3-300x170.jpg\")
<\/a><\/p>\nOverview and History:<\/h3>\n
![\"compared\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Compared-300x169.jpg\")
<\/a><\/p>\nTAG\u2019s Response:<\/h3>\n
What TAG Can Do Better:<\/h3>\n