Is category headed for its “iPhone moment”?

More smartwatches were shipped in the fourth quarter than Swiss watches, the first time that has happened, said a new report from Boston-based research firm Strategy Analytics.

The firm estimates that 8.1 million smartwatches were shipped in the fourth quarter of 2015, versus 7.9 million Swiss watches. By contrast, in the fourth quarter of 2014, 1.9 million smartwatches were shipped, versus 8.3 Swiss watches. Overall, the smartwatch sector has shown 316 percent growth, it said, with Apple capturing 63 percent of the global market.

And while some Swiss watch brands have launched their own smart devices, the company says they account for only one percent of smartwatches sold.

All that said, while Swiss watch exports have seen drops lately, Cliff Raskind, the company’s wearables analyst, says it’s too soon to point a finger at smartwatches.

“I think they are a minimal factor,” he says. “[The drop] has more to do with geopolitical factors. I wouldn’t diminish [smartwatches] but there are other things are driving those trends.” 

He feels if smartwatches have any effect, it is on the low end.

“It is companies like Swatch that have their head in the sand,” he says. “I don’t think the very high-end Swiss watchmakers have a lot to worry about. The very high end are about looking good as jewelry. That is 99 percent form. Regarding function, your grandfather’s Timex was all about function. Smartwatches started all about function, but their stock is also rising fast when it comes to form. They have been able to bring their bling to watches much quicker than they have been able to solve issues like battery life.”

With such seemingly gloomy news, some traditional watch aficionados have pushed back. On Hodinkee, Jack Forster wrote that “Swiss watches remain far ahead of the smartwatch market in sales value.”

“I would never dispute that,” Raskind says. “Obviously a lot can be read into what we wrote so we wanted to be clear.”

As far as the smartwatch category as a whole, his company is bullish on it.

“Obviously when you start with nothing, it’s easy to achieve 300 percent growth,” he says. “Smartwatches are starting to see early mainstream adoption. For the next few years will still see growth rates that are enviable by most business standards.”

His company also feels the Apple Watch is being underestimated, though it is hard to get exact figures, as the company bundles it into a category called “other.”

“A lot of people are maybe painting a picture of it not doing as well as it really is,” he says. “We are among the most optimistic forecasts. It has been pretty much a success story right out of the gate. If you look at the iPhone it didn’t come out of the gate at breakneck pace.”

Still, it might take a while before the category has its “iPhone moment.”

“At some point you will have one device on our wrist that will have strong battery life and strong medical sensors,” he says. “Whether Apple will do it, or someone else, that is where the category is headed over time. It could take 15 years from where we are now.”

He admits that some of the early feedback has been mixed.

“Living up to the hype would have been pretty hard,” he says. “The vision of what they can do is real. The version 1.0 of a lot of things is not perfect. Right now it’s the early adopters and loyalists who can see the visions of what these can do.”

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