LVMH wants to sell smartwatches to well-off fashionistas, introducing a techy timepiece under its Louis Vuitton suitcase brand that opens a higher-end front in the luxury conglomerate's fightback against Apple Inc.
Louis Vuitton's Tambour Horizon starts at $3500, about eight times the price of an entry-level Apple Watch and significantly more than many other connected devices from European watch and fashion brands, as well as more pedestrian gadgets from Samsung Electronics Co.
"We'll see more luxury brands break up the smartwatch duopoly between Apple and Samsung," said John Guy, an analyst at MainFirst Bank AG. "It not only provides consumers with a luxury option, where the aesthetic is more in harmony with technology, but it also provides a springboard for younger consumers to move into traditional Swiss watches at a later stage."
Within two years, Apple has become the world's second-bestselling watch brand, outranked only by Rolex, disrupting sales of low-end makers and convincing LVMH that it needs to offer alternatives or risk falling behind. While low-end Swiss manufacturers such as Swatch Group AG's namesake brand have introduced intelligent timepieces, exclusive makers like Rolex and Patek Philippe have largely steered clear for fear of sullying their image.
Midrange Swiss labels like Breitling and LVMH's TAG Heuer, specialising in sports watches, were among the first to recognise the disruptive potential of fitness bands that can monitor heart rates and track the wearer's activities. Now fashion brands are getting into wearable devices. Tommy Hilfiger and Hugo Boss each revealed models using Google's Android platform at this year's Baselworld watch expo in Switzerland, while Hermes started making leather straps for Apple Watches in 2015.
LVMH rival Richemont also recently dived into the market, offering a smartwatch under the Montblanc brand. Its $1500 price tag, like those of connected timepieces from Swiss brands such as Mondaine, is well below that of Louis Vuitton's Tambour Horizon. Last year Apple discontinued its line of 18-karat gold Apple Watches, which sold for approx. $22,260 moving toward the fitness market and adding health functions.
LVMH, which is France's biggest company by market value, has tried to speed up the embrace of technology in recent years – bringing in former Apple Music executive Ian Rogers as chief digital officer in 2015 and launching two multibrand e-commerce sites this year for its fashion and beverage brands.
Last year, LVMH bought Rimowa, a German suitcase maker whose products include luggage with electronic tags that let their owners know their whereabouts via Bluetooth. Louis Vuitton introduced 800-euro ($1510) iPhone cases inspired by its monogrammed trunks last fall.
LVMH got about nine per cent of sales last year from watches and jewellery. Louis Vuitton's traditional watches are produced in Switzerland. The smartwatch's case is assembled in that country and the watch uses technology developed in Silicon Valley, the company said in a statement that does not say where the inner workings are made.
Swatch Group, whose brands run the gamut from inexpensive pieces to six-figure Breguets, is developing an alternative to the Apple and Google operating systems for a planned Tissot smartwatch whose launch has been delayed. Louis Vuitton is relying on Android, as well as technology from Qualcomm Inc.
Louis Vuitton is targeting well-to-do travellers with the new watch, which will offer flight information and city guides for seven destinations, the company said in a statement. It's modelled after the mechanical Tambour line and is the first Android Wear smartwatch that functions in China.
The Tambour Horizon, which is round in contrast to the Apple Watch's rectangular shape, is 42 millimetres (1.7 inches) in diameter, making it smaller than its rivals. Like the competition, it also sends notifications of text messages, emails and phone calls.
"We asked Google to personalise the experience with Android Wear so that everything would speak the language of Vuitton," Hamdi Chatti, the brand's vice president for watches and jewellery, said by phone.