After losing it seven years ago, Rolex is expected to recapture its title from Apple this year as the world’s number one brand by revenue. Almost a decade ago, Apple entered the watch industry by introducing the Apple Watch, a do-it-all smartwatch that incorporates fitness tracking, health-oriented capabilities, and wireless telecommunication, along with timekeeping and many more features. While the Swiss watchmaking industry initially dismissed Apple as a competitor in the industry, the American tech giant became the largest and most profitable watch manufacturer in the world by 2017. However, Apple’s dominance is under serious threat, with Rolex rallying back to the top of the list.
Several reasons can be attributed to Apple losing the position to Rolex. Last year, Apple’s smartwatch business suffered a 12 percent decline compared to the previous year. To make things worse, sales declined by another 23 percent in the first quarter of 2024. The sharp decline over the last few quarters was due to a patent lawsuit that temporarily banned Apple from selling its latest models. Even if the sales figures increase over the next few months, it would be difficult for Apple to catch up despite the upcoming Apple Watch Series 10 launch.
Morgan Stanley and Luxeconsult predict Apple’s revenue from the smartwatch business this year will be worse than in 2023. Last year, the Cupertino-based had sales of around 16 billion Swiss francs (close to $19 billion). This year, it is likely to be less than 15 billion Swiss francs (around $17.75 billion).
On the other hand, Rolex’s revenue this year is expected to marginally grow as compared to last year’s 15.2 billion francs (slightly more than $18 billion). If the predictions are right, Rolex will regain its number-one position. In an article for the watch magazine Revolution, watch expert Oliver Müller expresses this as “more than just a commercial victory.” He further goes on to say that “it would be a symbolic triumph for traditional watchmaking.”
Rolex also has unique pricing power. The watchmaker has an average retail price of 12,500 francs (close to $15,000). In comparison, the average selling price of an Apple Watch is 415 francs (~$500), which is in the absolute lowest segment for the Swiss watch industry. Over the last few years, Rolex has also slightly increased its production to meet growing demand, especially after the pandemic. It is also building a new manufacturing facility with the aim to significantly increase its production capacity, which is set to open in 2029. Furthermore, the iconic Swiss watch brand has steadily increased prices. In 2024, Rolex hiked prices twice in the UK, which has also contributed to increasing revenue. It will be interesting to see if Rolex is able to keep its crown in the future.
