The Swatch Group, the world’s largest watchmaker, in June, celebrated production of its 333 millionth Swatch Watch, its namesake industry-changing watch introduced in 1983. The milestone was marked at “Splashtival,” a public festival in Lugano, Switzerland, where a new Swatch Watch collection (“Jelly in Jelly”) was unveiled. (A limited edition of 3,333 watches, with a design created by the Blue Man Group, will also be produced.)
Presiding over the celebration was Nicolas G. Hayek, 78, chairman of the board and co-founder of the Swatch Group. At its current rate of production and sales, Swatch Watch should pass the one billion mark by 2033, said Hayek, in an interview with the Swiss financial publication “Finanz und Wirtschaft.”
The group, which produces 18 brands from popular to luxury, plus watch movements and some electrical equipment, expects its total annual sales to grow 150 percent by fiscal year 2008. Its 2005 sales rose 8.3 percent and tallied $3.7 billion in 2005. Hayek predicted that should reach about $5.7 billion by 2008.
The watch for which its named debuted in 1983, was an innovative response to heavy competition from inexpensive Asian watches with quartz movements which had revolutionized watchmaking in the 1970s and seriously weakened the Swiss industry, based on mechanical watches.
Swatch Watch came from Switzerland’s two largest (but financially struggling) watchmakers—SSIH and ASUAG—which merged in 1983 as ASUAG-SSIH, with Hayek at the head.
The new watch was designed to be a casual, disposable, inexpensive (under $50), fashionable accessory, coming out quarterly with new designs and lines. It was housed in a plastic-case, with an improved quartz module produced with innovative automation and fewer parts (cutting production costs 80 percent).
The combination of affordability, design, shrewd and aggressive marketing, and innovative production made Swatch Watch a worldwide success almost immedlately. That led to “Swatch Stores,” Swatch collectors clubs, official timekeeping at several Olympic Games, Ski and Snowboard World Cup compeititons. Swatch watches featurted designs by noted artists, and there has been an increaing variety of Swatch watches, including metal-cased (“Irony”), diver (“Scuba”), flat, thin chronographs (“Skin”), and even an Internet-connected watch able to download data (“Papparazzi”), and one with Swatch’s revolutionary Internet time concept (“Beat”).
Swatch Watch’s success help revive the Swiss watch industry, while providing a solid financial base for ASUAG-SSIH, renamed SMH (1986) and then Swatch Group (1998). The Group started new brands and acquired others in popular to luxury categories. (In the United States, Swatch watches are no longer sold in jewelry stores, but through its 44 Swatch stores (plus a few select small retailers) and at www.swatch.com.)
Although worldwide sales of Swatch Watch have weakened, the Swatch Group is now the world’s largest watchmaker. “We’re number one in the watch industry and we will remain so,” declared Hayek in Lugano.