Apple's Watch Could Crush Companies Like Fossil
In a recent research note, Barclays analysts said they are "increasingly concerned" about Fossil's core business. Fossil makes watches for more than a dozen brands including Michael Kors, Marc by Marc Jacobs, and Burberry.
"We cannot overlook what is increasingly becoming a major disruption to the entire watch industry," the analysts wrote. "Future innovation at Fossil …will largely be challenged by hype and innovative offerings from deep pocket technology-credible competitors such as Apple, Samsung and Motorola."
Fossil is working on its own wearable tech through a partnership with Intel, but analysts warned that it "faces an uphill battle to establish its credibility" in the space.
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Brian Sozzi, chief equities strategist at Belus Capital Advisors, said the Apple Watch poses a threat to every company that sells watches in the $300 to $500 price range.
"The versatility of the Apple Watch, as seen in its multiple straps and faces, essentially gives the consumer every watch style in the mall plus an Apple ecosystem that makes one's life easier," said Sozzi. "At the price point, it's a major threat to every watch player that dumps their timepieces inside of locked counters at the likes of Macy's, J.C. Penney, and Nordstrom."
Apple's new device isn't expected to make a dent on the luxury watch market, however. Luxury watches cost upwards of $3,000.
"For people buying [luxury] watches, it's viewed as a long-term investment ... A family heirloom in many respects," Sozzi said. "For this group, they will own an Apple Watch and a Rolex."
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