“Swiss made” smart wearable and Internet of Things products are now 17% more expensive to produce!

Jan 15 2015, the Swiss National Bank announced it would remove the cap it had in place to prevent the Swiss franc from rising too high against the Euro (1,20 EUR equals ±1 CHF).

Today Jan 18 2015, the exchange rate is 1,0074 EUR equals ± 1 CHF meaning that Swiss made products become 17% more expensive in a blink of an eye!

Jan 15 2015, the Swiss National Bank announced it would remove the cap it had in place to prevent the Swiss franc from rising too high against the Euro (See [0])

What does it mean for the Wearable, Internet of Things or other products “Made is Switzerland?” a simple increase of production cost of ±17% !

See

2015-01-18 CHF/EUR exchange rate - source: http://finance.yahoo.com/q?s=CHFEUR=X

2015-01-18 CHF/EUR exchange rate – source: http://finance.yahoo.com/q?s=CHFEUR=X

What will be the tactics of Wearable’s “Swiss made ” in the next days or weeks?

Many producers may be impacted such as Richemont (Montblanc (See [2]), Cartier, Vacheron Constantin, Jaeger-LeCoultre), LVMH (Hublot, TAG Heuer, Bulgari, Zenith), Swatch Group (Breguet, Blancpain, Omega, Longines, Tissot, …) and Rolex.

Several tactics can be envisaged:

  • Reflect the increase in the production cost (completely or partially) onto the final price and INCREASE the price of the product
  • Digest the production cost increase and DO NOT increase the price of the wearables
  • Produce low-cost wearables in parallel and sell “low cost” wearables (see [1])
Withings Activité - source: www.withings.com

Withings Activité – source: http://www.withings.com

The Montblanc TimeWalker Urban Speed e-Strap - source: http://stories.montblanc.com/2015/01/timewalker-e-strap

The Montblanc TimeWalker Urban Speed e-Strap – source: http://stories.montblanc.com/2015/01/timewalker-e-strap

Links

[0] Swiss National Bank discontinues minimum exchange rate and
lowers interest rate to –0.75%: http://www.snb.ch/en/mmr/reference/pre_20150115/source/pre_20150115.en.pdf

[1] The Withings Activité Pop is here! What’s different from the Withings Activité? The side-by-side comparison:  http://blog.withings.com/2015/01/05/withings-activite-pop-is-her-whats-different-withings-activite/

[2] The Montblanc TimeWalker Urban Speed e-Strap: http://stories.montblanc.com/2015/01/timewalker-e-strap/#.VLudhmTF-XQ

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