TAG Chief Says No One Could Produce a Smartwatch in Switzerland

Jean-Claude Biver, the head of the luxury holding company that owns watch brand TAG Heuer, said Tuesday that TAG will not use the "Swiss Made" label for its in-development Apple Watch competitor. In an interview with Bloomberg, Mr. Biver said Switzerland simply doesn't have the technology needed to make a smartwatch.

About Face

There's a tad more to this admission than may be evident, but Mr. Biver also demonstrated an about face on the Apple Watch itself. He called Apple's unreleased wearable, "a fantastic product, an incredible achievement. I'm not just living in the tradition and culture and the past, I also want to be connected to the future. The Apple Watch connects me to the future. My watch connects me to history, to eternity."

Jean-Claud Biver

That's a far cry from his initial reaction. Shortly after Apple announced the Apple Watch in September, Mr. Biver dismissed the device, saying "It's too feminine and looks too much like the smartwatches already on the market. To be totally honest, it looks like it was designed by a student in their first trimester."

Swiss Made

The Swiss watch industry is storied, steeped in tradition, and dominated by large holding companies like Swatch and LVMH Moet Hennessy Louis Vuitton SA, the company Mr. Biver works for as head of its timepiece division. In December, Mr. Biver announced that TAG Heuer was developing an Intel-powered smartwatch that would feature a mechanical movement.

What's new today is that Mr. Biver said it wouldn't bear the Swiss Made label. "We can’t produce the engine, the chips, the applications, the hardware—nobody can produce it in Switzerland,” he said. "We’'re not in the communications industry, Switzerland is not, we don’t have the technology. If you don’t have it, you can’t innovate."

A Swiss watch company ditching the "Swiss Made" label is tossing out a major marketing tool. "Swiss Made" has become synonymous with precision, especially in the world of watches. This is, in part, a tribute to good marketing, but that marketing is made possible by rigourous quality control standards, even more rigorous testing (of watch movements), and very strict requirements for how much of a watch must be manufactured in Switzerland.

The very short version is that 50 percent of the value of a watch's components must have been produced in Switzerland. In addition, the movement must have been produced in Switzerland, and it must have been housed in its case in Switzerland. These protectionist regulations have not only protected Swiss workers, they have resulted in Swiss Made being a mark of quality.

Mr. Biver's statement reflects the reality that most of the things that make up a smartwatch are being produced elsewhere in the world—namely by Silicon Valley companies.

Apple Watch

I find it very interesting that Mr. Biver has changed his tune on Apple Watch. It's a sign of how serious he—and most likely his peers—take Apple's competition for your wrist.

As a fan of mechanical timepieces, I can't wait to see where Apple Watch pushes this entire market.