TIMEPIECES - Technology intensified R&D drive shift to quality.

26 may 2004

Article By: timepieces globalsources

With the increased demand for watches with sports and health-related functions and the technology transfers resulting from Swiss joint ventures, it will not be long before midrange to high-end multifunction sports watches will dominate production from suppliers in mainland China, Hong Kong and Taiwan.

Strong demand from the United States is pushing makers in the mainland, Hong Kong and Taiwan to step up R&D and production capacities. A study on the U.S. retail watch market done early this year said sales of sports watches could reach $2 billion by 2008, compared with 2003 sales of $1.7 billion. These watches range from basic sporty-design models to multifunction versions with pedometers and heart-rate monitors.

Suppliers in the mainland offer mostly basic digital sports watches although multifunction versions are available. Most suppliers claim they can offer any function required by the buyer as long as the type of movement is available in the market. Hong Kong offers a mix of basic and multifunction analog, digital and analog-digital sports watches, while Taiwan suppliers focus on multifunction digital models.

In general, available functions include alarm and chronograph for the low-end to midrange, and pulsemeters, heart-rate monitors, compasses and altimeters for the midrange to high-end.

A number of suppliers in the mainland and Hong Kong are now prioritizing development of more analog models for export. One reason most companies focus on digital is the easy availability of LCD modules. Analog suppliers use mostly Swiss and Japanese movements because of the lack of analog movement manufacturers. However, the cost of importing the movements has made prices of analog sports watches more than double that of digital versions.

This situation may change in the next two or three years. Swiss movement companies have already formed joint ventures with mainland watch manufacturers, under which the mainland company will assemble analog movements using technology and components from the Swiss partner. Initially, the movements will be used only for the mainland company's watches but can be sold to other watch manufacturers after two years.

In the meantime, suppliers' R&D teams are focusing on improving and developing more functions which can be programmed into the ICs of their digital and analog-digital sports watches.

In Taiwan, similar R&D efforts are being conducted. The island is strong in IC and LCD development and manufacture--most Hong Kong and mainland watch companies buy ICs and LCD panels from Taiwan suppliers. Sports watch suppliers in Taiwan are taking advantage of that strength and focusing entirely on producing multifunction digital sports watches.

Article By: timepieces globalsources