The Alpha and the Omega of the Swatch Group
Main image source: www.longines.com
Note: To check out the recorded version of this commentary as well as the follow-up group discussion, please head over to The Real Time Show!
Via a combination of excellent products and stratospheric marketing budgets, several brands have rightfully become benchmarks in their respective price brackets, as well as permanent staples in the watchmaking (sometimes mainstream) press.
You’ve probably already thought of some of these brands: Rolex, Patek Philippe, Breitling, and of course, Omega.
What about Longines?
Historically, one hasn’t heard that much about Longines - relatively speaking, of course - even if I’m pretty sure most people probably would be able to associate the brand with premium watches.
It’s like they’ve always been “there” without being “there”, content with quietly selling truckloads of mid-priced dress watches.
That has changed almost overnight - at least when one considers how things usually move in the Swiss watch industry - because Longines keeps popping up on my various feeds, and with good reason I think: they have been on quite a bit of tear lately, haven’t they?
In its latest half-year report for 2023, the Swatch Group claimed a year-over-year 11.3% increase in net sales, citing the very successful (paraphrasing of their words) development of retail sales at Swatch, Longines, and, as you might expect, Omega (and Harry Winston, that’s a bit of a surprise to me, but that’s for another discussion).
This makes sense to me because while the Swatch Group possesses heavy hitters such as Tissot and Hamilton, if you asked me who the true star players are, my instant answer would be Omega, followed by Longines (owing to my understanding that it’s a big revenue driver in Asia, a key territory for any luxury brand).
What I find striking about seeing those two names put together are the opposite trajectories both brands seem to be on, and I’d like to explore that opposition today.
Let’s call this an analysis of “The Alpha and Omega of the Swatch Group”.
Before I jump in, I’ll say that as much as I try to base my views on data, there just isn’t that much to go on, Swatch Group secrecy and all that. For this Audicle I have to base myself off of what little I can find online, as well as the general vibe of the comments I have read recently during my extensive daily perusal of watch news.
For Omega, that vibe has been, to me…kind of negative, actually, or at least uninterested.
That seems like such a misguided characterization when you look at the brand’s achievements and releases the Swatch Group listed in their 2022 full-year report: the MoonSwatch, the Chronochime watches, the Marstimer, the Speedmaster ‘57, and an updated Deville, among others.
But, and this is where I get controversial, I don’t think you can really count most of those when looking at Omega’s trajectory as a mainstream entity:
The MoonSwatch, as incredible as it was, is not going to be around in 50 years, and already, especially with the numerous “Limited Editions” Omega has already released, you can feel the air leaking from that balloon.
The Chronochime watches, spectacular as they are, are a niche product for a niche audience.
The Deville dress line is, in my mind, also a niche line; it is not an icon like the Speedmaster or the Seamaster 300M.
That brings us neatly to where Omega seems to be flailing, the crucial “bread and butter” lines that should ideally excite watch nerds while still selling by the truckload to the general public, but which currently serve to blunt the achievements I just listed: the aforementioned Speedmaster and Seamaster lines, the Planet Oceans and the Aqua Terras.
The 3861-powered Speedmaster Moonwatch update was a success, no doubt about it, but that was almost 3 years ago.
Recently there was the Speedmaster SuperRacing, featuring some quite exciting tech in the Spirate regulation system, but coming in at 44.25 mm in diameter.
That’s significant because while it’s in-line with many other Omega watches…
Well, it’s in-line with many other Omega watches!
I’m a huge Omega fan and have previously given a pass to their larger sizes, but the diameters and thicknesses that seem to feature in every new model announcement are leading some in the watch community to ask if Omega is paying attention to what the market actually wants (though, granted, we do often have to separate what watch lovers want from what the general public wants, which may in fact be larger sizes; I’d love to see that data if you want to share it with me!).
Case in point: just recently, Omega announced a new ceramic Planet Ocean with a titanium movement.
Awesome, right?
Turns out it’s 45.5 mm and eye-wateringly expensive, both facts which I know raised more than a few eyebrows.
The Omega Seamaster Dark Grey is a cool watch, but at that size and that price, is it really going to sell to a critical mass of consumers (Image source: www.omega.com)?
Same goes for the Planet Ocean Ultra-Deep line which offers watches that, while again technically very impressive, are correspondingly huge, and are not realistically going to sell in huge numbers, especially with Rolex and its SeaDweller and DeepSea becoming (anecdotally) more available now.
If you look at the Aqua Terras, the 38 mm size is fine, but how about a return to the 36 mm option of old?
The “Shades” options seem to be well received overall now, but why did it take so long to get from the announcement to ADs’ windows?
And then there’s the Seamaster 300M, which still seems to be selling like crazy (with good reason, it’s hard to find a better dive watch for the money), but which also stands to become diluted and confusing given the many different configurations which seem to appear almost monthly. That’s a danger, because the 300M, rightly or wrongly, tends to be cross-shopped heavily with the Rolex Submariner, which is by comparison a very tight model line.
Turning to all the lines, how is it that one of Omega’s biggest announcements last year was a “refresh” of their models which was basically a new dial color and a solid caseback?
With all that said, if I had to summarize my views on Omega, it’s that this is an extremely, extremely technically competent brand, whose releases taken individually can be amazing, but which as a company seems to lack a cohesive direction (and that’s not even getting into the recent, internal auction scandal).
So, that’s the literal Omega of the Swatch Group, and now, on to what - dare I say - might be the Swiss conglomerate’s new Alpha.
Longines.
Wow, do they seem to have turned on the jets.
Yes, this is a brand that I hypothesize could also stand to strategically cut more than a few SKUs, but in terms of new model releases, my thought is that they have been rocking and rolling.
You know I love some CEO talk, and the head office is significant at Longines because it was assumed in 2020 by Matthias Breschan from Walter Von Känel, who joined Longines in 1969 and himself became CEO in 1988.
That’s an incredible career path and I hope he is enjoying his well-deserved retirement, but you have to imagine that some “new blood”, so to speak, was positive for the brand, especially one like Longines whose heritage and branding, while notable, could easily come across as “stuffy”.
Actually, the current reality of Longines couldn’t be farther from that. Yes, you can still find attractive dress watches with complications that would cost far more elsewhere, but if that’s Longines’ past, I wouldn’t blame you for thinking it was eyeing Breitling to set a course for its future!
Indeed, the Spirit collection just seems to be getting better and better. It started in mid-2020 with 40 and 42 mm watches in steel,which I liked very much: they looked well-built and were designed in such a way that they could fit almost any description, from vintage inspired pilot’s watch to modern day field watch. Since then, the line has quickly grown to include titanium watches, flyback chronograph watches, even true “flyer GMT” watches in the Zulu line.
Talking about the Zulu in particular, they originally launched in 42 mm sizing; watch fans were impressed but wished for something smaller, and wouldn’t you know it, there’s now a 39 mm option as well.
How’s that for responsiveness to feedback?
The Spirit line aside, there’s been the Ultra-Chron, the kick-in-the-ass the Hydroconquest line needed with another “flyer” GMT complication, and the just announced 39 mm refresh of the Longines Legend diver.
How’s that for momentum?
Granted, these horological goodies come at a price, and Longines watches, while still good value relative to brands offering similarly spec’d models, are noticeably more expensive than they might have been even just a few years ago (for instance, the Spirit Flyback Titanium has an MSRP of 5,400 euros on a strap).
These price increases have to be mentioned, and while I’ve deliberately talked about “trajectory” for both Omega and Longines so far only in the context of products, price-wise it does seem like the Swatch Group has a path in mind for both brands, with Omega presumably trying to chase Rolex further upmarket, and Longines following behind to fill the ensuing vacuum.
There’s always a danger when trying to make this move (I mean, think of the criticism Seiko still gets for not offering SKX-pricing on new releases that run circles around that model), but to me, whereas Longines seems to be soaring into its new role, to me the indicator lights are blinking yellow for Omega.
I’m not in any way saying that Omega is in danger of disappearing completely, but obviously the watch industry as a whole is stronger when everyone is firing on all cylinders, and while Rolex will never admit it keeps an eye on competitors, I have a feeling that a strong Omega also means a stronger Rolex, so in the end consumers win.
My two cents: Omega might consider trying less to impress everyone with its technical prowess. They don’t need to: it’s already crystal-clear they are an engineering powerhouse, and in my opinion no one - not even Rolex - industrializes cutting-edge technology while also occasionally offering high-horology like Omega does.
Instead, if Omega would just start operating in the middle of the product bell curve again, notably with less high-performance but smaller-sized watches, it would paradoxically find itself moving forward on another bell curve to the most upper echelons of successful watch brands.
In the meantime, there are several Spirit models I’d love to check out in person…