Luxury Portable Consumer Electronics in the US

PROSPECTS

Vertu goes out of business in July 2017

Luxury mobile phones experienced another poor year in 2017, as evident from luxury smartphone maker Vertu going out of business in July. Following several transfers of ownership in its recent history, Vertu simply could not justify further production of its luxury products without sufficient demand.

More luxury brands continue to launch high-end smartwatches

As smartwatches are becoming more popular in general, it has become evident that more luxury brands are interested in joining the competition. Thus far in 2018, brands such as Emporio Armani, Fossil and Michael Kors have either launched new smartwatch models or revamped versions of past models.

The life expectancy of luxury wearables affects demand

While virtually no source exists that can track the frequency with which individual households purchase wearables, demand for smartphones should be considered a parallel. The reason is that battery degradation is inherent to small electronics, and the operating system for smartwatches functions similarly to smartphones.

COMPETITIVE LANDSCAPE

TAG Heuer performs well

In late 2016, TAG Heuer CEO Jean Claude Biver reported that the TAG Heuer Connected smartwatch had beaten its sales expectations for 2016 and was expecting a continued surge in sales moving into 2017. Whilst there has been no comment on the 2017 performance for the Connected smartwatch thus far, the launch of Connected Modular 41, a new size for the TAG Heuer smartwatch line-up, is a good indicator that the brand is performing well within the wearables space and attempting to expand its reach.

Apple and Tag Heuer continue to lead luxury wearables

Apple, with its Apple Hermès iWatch, and TAG Heuer, with its Connected series, continued to lead luxury wearables in 2017. Apple Hermès iWatch reportedly outperformed the entire Swiss watchmaking industry in Q4 2017, according to CEO Tim Cook, and TAG Heuer CEO Jean Claude Biver stated its sales of the Connected series exceeded expectations.

An upgrade to the Snapdragon processor

In September 2018, Qualcomm announced the new Snapdragon Wear 3100 SoC processor, an update from the 2016 model, which is known for its shortcomings, mainly speed and battery life. Whilst there have been no indications of when this processor will be rolled-out to the public, Fossil, Louis Vuitton and Montblanc have announced they are working with this new processor to update their wearables to maximise the new benefits of battery life and speed.

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