Luxury Watchmaker TAG Heuer Sees Digital 'Tsunami'

Maker of TAG Heuer watches shifts gears, now plans to craft a smartwatch and possibly make acquisitions, in the wake of Apple Watch.



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Today's world is no place for the analog purist.

Luxury watchmakers initially dismissed the threat posed by Apple Watch and other smartwatches. Now the head of the watch group at luxury goods company LVMH, which includes the TAG Heuer brand, said the company is four months into a smartwatch project, Reuters reports.

"We have done several partnerships and might also do acquisitions," said Jean-Claude Biver, head of LVMH watches and TAG Heuer interim CEO, according to Reuters.

Reuters also quotes LVMH general manager Guy Semon: "Smartwatches represent a challenge to the Swiss watch industry that is comparable to the appearance of quartz technology. We cannot ignore this tsunami that is coming closer."

[For more on what makes a successful device tick, see Wearables Make Hardware The New Software.]

Back when the Apple Watch was announced, InformationWeek readers engaged in a lively debate over whether the likes of Rolex and TAG Heuer would have to respond to smartwatches and add some level of software-driven, digital capability to their luxury timepieces. I wrote:

I don't know if I want a smartwatch like the new Apple Watch, but I'm certain that the next watch I buy will be a smarter watch. That reality is the simple lesson of this week's Apple Watch launch. No matter your business, if your company doesn't innovate with software, you risk losing your intimate tie with customers and surrendering profits to someone else.

The response fell into three broad camps: the digital doubters, the digital believers, and those who wondered if luxury watchmakers could make the digital leap even if they wanted to. Here's a sample from each.

BillB031, for the digital doubters:

Where does the Author get these ideas for a story? I don't own a Rolex, but I do own a Breitling Navitimer. The reason people buy these watches is because of pure mechanical Art. So no, nothing digital will replace these watches. Replace a Timex, Seiko, other junk watches? Yes. Replace a Rolex? Hell no.

GregC438, a watch aficionado, for the digital believers:

There is an old saying... when the outside world is changing faster than the inside of your company, you are doomed for failure. Nobody loves watches more than me. I have a collection of 3 Rolex, an Omega Speedmaster, and a Tudor (Rolex's cousin). I have been fascinated with mechanical watches and wore one on my wrist for nearly two decades. That is until my Pebble watch came along. I can't put a Rolex back on my wrist because a simple Pebble does so much more for me as a professional.

InformationWeek editor Thomas Claburn, for those who doubt luxury watchmakers can make the leap:

There's a reason US software companies, particularly Apple, Google, and Microsoft, have done so well. Good software design is difficult. I cannot think of a single software application from a hardware vendor (except perhaps TiVo) that I enjoy using. This becomes particularly obvious any time you use an application designed by a printer company. It's invariably awful.

Carmakers have wrestled with the same software challenge, struggling to create digital interfaces that meet the high standards set by their mechanical engineering and existing knobs-and-buttons interfaces. The hospitality industry is trying to find the right balance between digital convenience and personal service. Starwood, for example, is offering guests the option of bypassing a check-in desk and going straight to their rooms, letting them open their doors using a smartphone app.

Striking the right balance won't be easy, regardless of the industry. But as TAG Heuer shows, it also isn't optional.

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Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio

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