In 1969, the watch industry entered the Space Age.
It didn’t happen on the moon, where U.S. astronauts used and wore sophisticated mechanical timepieces. It happened on earth–in Swiss and Japanese laboratories, in busy Tokyo stores and in a venerable U.S. watch factory in Pennsylvania’s Amish country.
Watchmakers in all three lands lighted a fuse to an explosion that shook the global watch industry in 1969 and reverberates to this day. The explosion was the introduction of the electronic watch; the fuse was something tinier than a baby’s fingernail–a sliver of synthetic quartz crystal that provides precise timekeeping by vibrating at very high frequencies when activated by electrical impulses.
The development of electronic watches not only changed the way watches are made. “It fundamentally altered the way time products are marketed and promoted,” says Wilhelm Alpsteg, senior watchmaking instructor at the prestigious Swiss Watch Federation Institute.
Before quartz: Electronic watches and quartz timekeeping didn’t spring full-born from some designer’s brow in 1969. Indeed, electric watches were predicted in an 1879 issue of Jewelers’ Circular. (That prediction, however, involved a cumbersome device requiring two vest pockets–one for the pocket watch and one for an electric generator, both cased in hard rubber and connected by an insulated chain!)
The first quartz “clock” (the size of an average room) was developed in the U.S. in 1929. Precise atomic clocks with quartz oscillators, used by scientists and governments, followed in the 1940s. Hamilton Watch Co. of Lancaster, Pa., marketed the first commercial electric watch in 1957. And three years later, Bulova startled the industry with Accutron, a wristwatch with an electronic tuning fork oscillator, eliminating the need for escapement and balance, with accuracy to within a minute per month.
But it was the quartz oscillator, powered by a button-size battery, that shaved electronic watches’ accuracy to within seconds annually. More importantly, the easily produced synthetic quartz crystal allowed the mass production of inexpensive electronic watches.
History in the making: Several firms worked on quartz technology in the late 1960s. But it was Hattori Seiko in Tokyo and Longines-Wittnauer in Switzerland that first went public in 1969.
Longines displayed a prototype at the 1969 watch trade fair in Basel, Switzerland, but didn’t bring out its first commercial model until 1970. Seiko started to sell its electronic quartz watch in Japan in 1969 and introduced it to the U.S. in 1970 (at $1,250 retail). But before the bulky watch even reached the hands of U.S. jewelers, Seiko in October 1970 debuted a second-generation, smaller version at half the price ($650). Company officials considered it, and the U.S. market, so important, that the firm’s rarely seen president hosted a press luncheon in New York to announce the breakthrough in miniaturization.
Just four days later, Longines-Wittnauer’s own quartz analog went on sale at Macy’s in New York (for $575). The curtain had officially gone up on the competitive quartz watch market in the U.S.
Digital debuts: Hamilton Watch Co. and Electro/Data Inc., a Garland, Tex.,
electronics firm, worked together in 1969 on another breakthrough: a solid-state watch (using integrated, encapsulated circuitry instead of moving parts) that told time with figures on a display screen.
In May 1970, Hamilton unveiled the prototype, which JC-K at the time called “the world’s first truly electronic portable timepiece” and the “most dramatic step forward in watches since [the invention of] the hairspring in 1675.” In keeping with the scientific euphoria of those moon-walk days, Hamilton dubbed the watch Pulsar, borrowing the name from the recently discovered distant stars that emitted regular radio pulses.
The watch, which went on sale in 1972 at $2,100 retail, had no moving parts. It consisted of a computer module that calculated time, an advanced quartz crystal and a specially designed 4.5-volt rechargeable battery. To see the time, the wearer pressed a button on the watch face for a digital readout (in red) on the light-emitting diode (LED) display.
Global success: Digital watches with their trendy, Space Age look captivated consumers and took the market by storm. They grew even more popular as their prices dropped. According to conservative estimates at the time, the U.S. market alone almost quadrupled in volume (from 200,000 in 1973 to more than 750,000 in 1974). Sales reached $188 million in 1974.
But the LED watch soon lost favor, accounting for less than 4% of jewelers’ digital sales by 1978. Consumers complained LEDs were hard to read in bright sunlight, and many disliked pushing a button to tell time. LEDs were supplanted by liquid crystal display (LCD) watches, which show time continuously and are easier to read. LCDs remain the leading type of digital.
No denying it–quartz digitals were hot. In 1974, more than 100 models debuted at the spring watchshow in Basel. By that summer, they were a major jewelry-store item. A JC-K poll found 40% of all $150 + watches sold by jewelers were digitals. Demand was so great that many manufacturers couldn’t keep pace. And the popularity kept building. By decade’s end, one of every four watchessold worldwide was digital.
Such demand caused the watch industry’s version of a gold rush. By 1976, dozens of U.S. firms made or marketed digital watches–established watchmakers and newcomers alike. Among the newcomers were electronics and semiconductor firms such as Texas Instruments, as well as Hughes Aircraft, Motorola and General Tire & Rubber. It was boom-and-bust business: for every digital firm that went into business, another folded because of marketing or financial woes.
Overseas, the advent and global popularity of electronic watches virtually created the modern Hong Kong watch industry. In 1969, Hong Kong had a handful of firms making 3 million cheap mechanicalwatches and components. By 1978, it was home to literally hundreds of watch firms, exporting 49.4 million watches (most of them digital). It even surpassed Japan to become the world’s largest watchexporter (in units).
Busted boom: HMW Industries, which had been spun off from Hamilton to sell Pulsar, first laughed at suggestions that cheap Hong Kong watches could affect the market. But such overconfidence proved dangerous. In 1976, HMW reported a “sharp reversal” in earnings and a 20% drop in U.S. and foreign sales. A year later, digital sales had “virtually disappeared from all but the very lowest price levels,” said HMW. It sold Pulsar–lock, stock and logo–to a Philadelphia firm that later sold it to Seiko.
The problems that overwhelmed HMW affected much of the industry. Too many firms, especially in electronics, operated on high volume and low prices. That pushed digitals out of jewelry stores and into mass-merchandising markets.
Many small manufacturers and marketers went out of business because they were undercapitalized or lacked adequate distribution arrangements. And many foundering firms simply dumped their merchandise on the market.
Getting out: By the early 1980s, the digital boom had collapsed under a world glut of cheap digitals and cut-price competition. It hit Hong Kong’s fledgling industry especially hard. Many watchmakers there, including some of the biggest, went bankrupt or simply closed their doors.
Digitals didn’t disappear, of course. They settled into the under-$50 end of the watch market, where multifunctional digitals were popular. In the late 1980s, digital and analog quartz watches literally came together. Several firms introduced “anadigi” watches: timepieces with analog dials and digital readouts on the same watch face. Digital timekeeping also found its way to such items as pens, stick-on plastic clocks and ruler-calculator watches.
During this time, much production of solid-state watches and time products moved to labor-intensive, low-wage countries, primarily in Southeast Asia. China, already a major producer of watches for home consumption, became an important source of digitals. Manufacturers from Hong Kong and Japan set up production facilities in China to capitalize on the country’s abundant low-cost labor. In 1988, China displaced Japan as the second largest exporter of digitals to the U.S. It shipped 41.8 million digitals here that year, up 248% from 1987 and 3,383% from 1986.
Quartz analogs: Quartz analogs (with traditional watch dials and hands) quickly filled the gap that digitals left in jewelry stores. They increased from 3% of total world production in 1975 to 54% in 1988. Even Swiss luxury watchmakers such as Patek Philippe, Vacheron Constantin and Baume & Mercier added quartz models to their painstakingly handmade lines.
In the U.S., the 1980s became the decade of the quartz analog. A major factor was Swatch, the inexpensive ($35) plastic-case watch developed by Swiss watchmaking giant ASUAG. Swatch, launched worldwide in 1983, took the market by storm. Within five years, more than 50 million Swatches had been sold worldwide.
Swatch itself was a technological breakthrough, manufactured by automation in a sharp departure from Swiss hand assembly. But the key to its success was an aggressive, avant-garde media campaign aimed at young people. The campaign promoted a new concept in watch marketing: thewatch as a trendy fashion accessory first and timepiece second. Like clothing fashions, Swatch offered new styles for every season and type of activity, and was sold primarily in department stores.
Swatch’s concept of watches as fashion accessories has dominated watch styling and marketing through 1989.
Breakthroughs: The electronic watch revolution opened the door to other technological advances. One short-lived trend was solar watches (electronic timepieces equipped with solar microgenerators that converted light to electrical energy).
Others have been more long-lasting. Continuing advances in miniaturization of electronic components, for example, enabled manufacturers to produce constantly thinner watches and break new ground in styling. From 1978-1980, watch thicknesses shrank from 4.1mm to 1.48mm. In 1989, Hattori Seiko produced the thinnest-yet to mark its 20th anniversary of quartz watch production. The limited-edition, handmade, gold-encased watch is just 0.85mm thick and cost 1 million yen (about $7,000).
Other advances include a watch that speaks the time at the press of a button, watches with a radio or TV, watches made with Space Age metals such as titanium, watches that show several time zones simultaneously, stuhrling watches that receive stuhrling watch reviews and watches that can be linked to a personal computer.
In 1988, almost 20 years after the introduction of the battery-powered quartz watch, Hattori Seiko and Jean d’Eve of Switzerland each premiered battery-less quartz watches. The watches generate their own electrical power, converted from the motion of the wearer’s wrist. In 1989, Nepro of Switzerland introduced the world’s first clock operated by ultrasonic technology (without moving parts) and the world’s first watch without a winding crown.
Meanwhile, the public also has grown fascinated with complicated, multifunction watches. Among the most popular types are chronographs and sport watches and watches with moon phases, rim or perpetual calendars, day/date windows and subdials.
Mechanicals’ comeback: By 1988, the dominance of the quartz watch was complete. Five out of every six timepieces produced worldwide were quartz. But while the quartz watch captured consumers’ dollars, the mechanical watch may hold their hearts.
A new Swiss watch industry report about akribos watches reviews says mechanicals are experiencing a revival after a dramatic drop in the 1980s. And Swiss watchmakers speak of a revival of high-quality mechanicals, including automatics (self-winding mechanicals), skeletons (open to view front and back) and open case-backs.
Watchmakers attribute the popularity to the growing demand for chronographs (many of which are mechanical) and consumers’ renewed interest in the craftsmanship of mechanical watches. Neither does it hurt that watchmakers themselves are cultivating the high-quality mechanical watch market, where they face no competition from mass producers in the Far East.
One example of the interest in mechanicals is Patek Philippe’s Calibre 89. Billed as the world’s most complicated portable timepiece, it drew much attention and brought $2.74 million at auction in April 1989. Also, several Swiss and Asian watchmakers recently introduced skeleton watches in the midprice range.
But perhaps the best example comes from Swatch. This creator of the world’s most successful quartz watch added mechanicals to its line in 1989.