Apple Pushed Biggest 7-Year Drop In Watch Sales

WATU.S. watch sales fell the most in seven years in June, one of the first signs Apple Inc.?s watch is eroding demand for traditional timepieces.

Retailers sold $375 million of watches during the month, 11 percent less than in June 2014, according to data from NPD Group. The 14 percent decline in unit sales was the largest since 2008, according to Fred Levin, head of the market researcher?s luxury division.

?The Apple Watch is going to gain a significant amount of penetration,? he said Thursday in a phone interview. ?The first couple of years will be difficult for watches in fashion categories.?

The market for watches that cost less than $1,000 is most at risk, as consumers in that price range have indicated they?re the most likely to buy an Apple Watch, Levin said. Sales of watches costing between $50 and $999 registered drops in June, the biggest being a 24 percent decline in timepieces from $100 to $149.99, according to NPD?s data.

The Apple Watch isn?t the only cause of the downturn. Lower-priced fashion brands suffered as retailers and department stores offered more discounts due to those products? ?saturation? with consumers, Levin said. That category includes brands such as Timex, Guess, Burberry and Tissot.

?In the short term, brands at accessible price points are going to have to think very seriously,? he said.

Most U.S. watch sales data is limited to exports of Swiss watches to that market, which don?t measure sales to consumers. Those shipments rose every month except May in the first half of 2015, according to according to Federation of the Swiss Watch Industry data available on Bloomberg Intelligence. The first half increase was 4.2 percent.

?Ice Age?

Apple Inc.?s refusal to say how many smartwatches it has sold has investors and analysts relying on guesswork to estimate sales. Harder yet is gauging the impact on the $50 billion Swiss watch market. Elmar Mock, one of the inventors of the Swatch, said in March that Apple may cause an ?ice age? for the four-century-old industry. The computer maker has already shaken up the music market with its iTunes software, while its iPhone supplanted Nokia Oyj?s dominance.

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