(Bloomberg) -- Last week, Montblanc became the first brand in the Richemont family of luxury companies to put out a smartwatch. The Montblanc Summit, based on Google's Android Wear 2 platform, aims to compete with, among others, the Apple Watch and rival Swiss brand TAG Heuer's Connected Watch (which was released last year and received a major update in the form of a modular version this month).
Like the TAG, which is also on the Android platform, the Montblanc watch is targeted to fans of the brand. By designing the case to look like a classic mechanical watch from its 1858 line, it hopes to attract a mix of loyalists and also millennials who aren't necessarily accustomed to wearing anything on their wrists but who might try out a unique-looking smartwatch.
"We hope that the Summit shows customers new and old that Montblanc is rooted in innovation and adapts to what the modern professional needs," said Montblanc Chief Executive Officer Jérôme Lamberg.
The differences between the TAG and Montblanc versions are not vast—they both offer an array of Android apps. While the TAG has GPS for sports apps and NFC for making mobile payments, the Montblanc watch has a heart-rate monitor embedded in the back of the case.
They both come loaded with watch faces that look like their iconic models, which these companies swear is important, but to me slightly misses the point. Fans love mechanical watches for their ingenuity, beauty, and internal structural achievement—a dimly-lit 2D simulacrum on a screen, cased in something that looks like a mechanical watch, is hardly the same thing
The Greater Market
Smartwatches have become a large category but have still undersold compared with expectations. Market research firm IDC estimates that 19.8 million smartwatches were shipped in 2016, missing a 28.3-million projection by almost half. In the third quarter of last year, for example, Apple Watch sales were down more than 70 percent.
A large part of the problem is that makers of this kind of wearable (as opposed to a simpler, more purpose-built Fitbit) haven't yet really made a case for why its users need them, when a smartphone is almost always near at hand.
Think about it. If you own a smartwatch, and you accidentally leave it at home, what do you do when you get to work or school and you realize it's not with you? Then think about what happens when you leave your phone at home.
Improving by Iteration
When Apple Inc. launched its series 2 watch in September 2016, it featured improvements based on feedback from communities that use the device.
"A significant difference between the first and most recent versions of Apple Watch software is that a lot of what you want to do, from functional stuff to what's just plain fun, lives at the top layer of the UI now," explains Jack Forster, an industry expert and the editor-in-chief of the watch enthusiast website Hodinkee. "It's often simple stuff, but it makes a huge difference in the experience. For instance, you can change the watch face now much more easily and without navigating submenus. There's a familiar-to-Mac-users app dock now, and so on."
The Apple Watch 2 also featured built-in GPS, which meant that a runner or cyclist could hit the road without having to carry a phone—a huge difference for athletes.
While Apple owns more than 40 percent of the smartwatch market, according to IDC, you'll find more community enthusiasm, in my experience, for such watches as Garmin's sports offerings—which offer exactly what outdoor athletes want.
"Dedicated fitness trackers still do a better job at filling specific needs, although there are other mission-specific smartwatches out there that show how much room there is left to innovate and clarify product identity," explains Forster. "Casio makes trekking-oriented smartwatches, for instance."
The same IDC report that had smartwatches on the decline listed Garmin Ltd. as the industry's one bright spot, increasing more than 300 percent year over year. (That report came out right as the Apple Watch 2 was hitting stores and does not reflect a bump that may have come from the new technology.)
If Swiss watchmakers and Apple and Google want to make smart timepieces more essential, it's good that brands with smaller, more specialized communities are having watches made just for them.
Montblanc's Summit Watch
"Smartwatch makers are creating products with a clearer identity," says Forster. For example, the Montblanc watch comes with a clever, intuitive worldtimer app that was built for the timepiece. Why? Montblanc users are travelers.
"The Montblanc customer is a modern, on-the-go professional that enjoys the luxury heritage lifestyle/status that Montblanc is known for," explains Lambert, the CEO. "Today’s Montblanc customer is living in a digital world where connectivity is key to success."
At 46mm across, the watch is large, as well. That's too big for my wrist, but it's huge for a reason.
"This large face, made with curved glass, allows for users to play in various apps and text or email with ease," Lambert added.
Future versions of the Summit may link with Montblanc's Augmented Paper (paper notebooks that record your writing into the cloud) in a work/play ecosystem that suits fans of the brand perfectly. Say you're traveling business class on a flight from Dubai and you can't bring on a laptop or tablet. Suddenly your phone, your watch, and such gadgets as Augmented Paper become much more important.
A Long Road
Analyst John Guy of Mainfirst Bank estimates that the Connected Watch has come to represent less than 10 percent of TAG Heuer total sales over the past year; in other words, it didn't change TAG's bottom line or its business model. And it likely won't, at least for a while. (In pricing, the Swiss are nowhere near competing with Apple. At roughly $960 for the Montblanc and $1,500 for the TAG, they way overshoot the $369 Apple Watch 2.) But they are teaching the Swiss brands what their users want from a smartwatch—if anything.
"I think it's still not entirely clear to a lot of players in the traditional watch space why their fans would want a smartwatch version of their watches," says Forster. "Which isn't very surprising, because I don't think the tech world in general has figured that out either.
"Manufacturers feed new designs into the marketplace, and consumers say to themselves, 'Well, I didn't know it, but I really do want one,' and as various products are accepted or rejected, manufacturers refine their approach."