Traditional watchmakers and smartwatch manufacturers are carving out distinct economic paths as the global timepiece market fractures into separate consumer categories, according to industry financial data. While wrist computers outsell conventional timepieces tenfold by volume, data from the Federation of the Swiss Watch Industry FH, Counterpoint Research, and major Japanese watchmakers reveal that traditional brands are surviving through starkly different survival strategies.
Swiss Luxury Strategy: Selling Fewer Units at Higher Prices
Swiss watch exports fell 1.7 percent in 2025 to CHF 24.4 billion (roughly $30.3 billion) while unit volumes dropped 4.8 percent to 14.6 million devices, according to figures released by the Federation of the Swiss Watch Industry FH. This followed a steep 2024 downturn where volumes fell 9.4 percent. Luxury houses maintained revenue by abandoning entry-level tiers and focusing on watches priced above CHF 3,000 (approximately $3,720). According to financial reports, turnover for watches under CHF 3,000 collapsed by 15.6 percent in 2024 alone.
Swatch Group reported an operating margin of 4.5 percent for fiscal year 2025, while Richemont recorded 3.2 percent for the first half of fiscal 2026, according to corporate disclosures. Traditional mid-tier Swiss brands felt the steepest drops, with Tudor sales down 34 percent and Oris down 23 percent. Industry analysts note that abandoning affordable price points cuts off the pipeline of entry-level buyers who fuel future luxury demand.
Did you know? Swiss watch export volumes hit what the Federation of the Swiss Watch Industry FH officially classified as a “historically low level” in 2024.
Smartwatch Market Consolidation and Shifting Shipments
The narrative that smartwatches continuously dominate all traditional timekeeping has faced empirical setbacks. Counterpoint Research recorded five consecutive quarters of shipment declines through Q1 2025, driven by weakening Apple shipment volumes and a sharp deceleration in the Indian market. Although the global smartwatch market recovered to post 4 percent growth across 2025 as a whole, buying behavior shifted decisively toward mid-tier devices.
Data from Counterpoint Research shows that the sub-$100 smartwatch segment shrank 17 percent in Q1 2025, whereas the $100 to $200 tier expanded 21 percent. Consumers are consolidating around fewer, higher-quality wrist computers rather than treating them as disposable gadgets. This shift mirrors how buyers approach traditional quartz timepieces, creating space for durable, non-connected watches to serve as secondary everyday items.
Japanese Watchmakers: Growth Through Accessible Quartz
While Swiss brands moved upmarket, Japan’s big three watch manufacturers expanded by sticking to accessible quartz models, outperforming both Swiss competitors and the broader smartwatch market. Seiko’s watch division reported fiscal year sales reaching ¥203 billion (~$1.40bn), representing a 27 percent year-on-year increase for the period ending March 2026, according to Seiko Group Corporation data.
Citizen Watch Co. Ltd. reported its watch business turnover hit ¥197 billion (~$1.36bm), up 10 percent with operating profits surging 38 percent. Meanwhile, Casio Computer Co. Ltd. reached ¥185 billion (~$1.28bn) in its timepiece segment, marking an 19 percent annual increase. Together, the three Japanese groups generated ¥585 billion (approx. CHF 2.9 billion or $3.6 billion), supported by high profitability margins. Seiko’s watch business posted a 15.1 percent operating margin—nearly five times higher than Richemont’s margin during the same timeframe.
Durability Versus Connectivity: Why Both Industries Coexist
Smartwatches ultimately eliminated the cheap, disposable utility watch purchased solely for telling time, but they failed to displace horological items bought for status or mechanical appreciation. According to Casio Computer Co. Ltd. disclosures, strong year-end holiday demand for G-Shock timepieces caused genuine inventory shortages. G-Shocks and mechanical dress watches survive because they require no software support windows, chargers, or pairing protocols.
The contemporary watch landscape is split cleanly into three segments: Swiss luxury status symbols relying on high price points, tech-driven wrist computers consolidating around reliable mid-tier price brackets, and Japanese quartz durability brands capturing volume through high-margin, accessible timepieces. Rather than a zero-sum contest, the market demonstrates that consumers treat connected wrist computers and traditional watches as entirely different product categories.
Frequently Asked Questions
Did smartwatches kill the traditional watch industry?
No. While smartwatches outsell traditional watches roughly ten to one by volume, high-end Swiss luxury brands and accessible Japanese watchmakers continue to generate billions in revenue by pivoting to status and durability.
How do Japanese watchmakers compete with smartwatches?
According to financial reports from Seiko Group Corporation, Citizen Watch Co. Ltd., and Casio Computer Co. Ltd., Japanese brands grow by offering affordable quartz timepieces that require no recharging, pairing, or software updates.
What is happening to Swiss watch export volumes?
According to the Federation of the Swiss Watch Industry FH, export volumes dropped 4.8 percent to 14.6 million units in 2025, following a 9.4 percent decline in 2024, as Swiss brands abandoned entry-level models to focus on luxury watches priced above CHF 3,000.
Are smartwatch sales still growing?
Counterpoint Research data shows that after five consecutive quarters of decline through Q1 2025, the global smartwatch market rebounded by 4 percent across 2025 as consumers consolidated purchases around the $100–$200 price tier.
Explore our latest gear reviews and market analyses to stay informed on shifting tech and horological trends. Share your thoughts in the comments below or subscribe to our newsletter for weekly industry breakdowns.
Worth a look