Time's up for watch sales in Japan

Ian Rowley


Spare a thought for Japan's watchmakers. According to a new survey by Seiko Watches, the proportion of Japanese aged between 16-49 wearing wristwatches has plummeted from 70% in 1997 to 46% today. The culprit, if you haven't already guessed, is the mighty cell phone. While the trend is a global one, it's more pronounced in Japan, where mobile phone ownership passed 81 million in 2004, and gizmo-jammed handsets rule the roost. (Only in Japan can you use your handset to discern star constellations, while listening to music downloaded over a 3G network, before taking a breath-test for alcohol to make sure you're okay to drive).

Of course, falling watch shipments is only one of the numerous impacts of mobile telephony on Japanese habits. Not all of them positive. At Kichijoji station, half an hour from central Tokyo, signs on escalators warn women to be wary of men using phones to attempt sneaky photos of their underwear. Similarly, the Times of London got into a lather in 2004 when it discovered a filter device on sale in Japan which enables mobile phones to seemingly peer through clothes. The report warned that the filter was particularly effective on dark bikinis.

Other developments are less salcious but manna from heaven for academics and marketers nevertheless. One example: the impact of phone-based shopping. These days there is just about nothing that you can't buy on your handset in Japan—from furniture to a date. At the beginning of the year, a surge of mobile phone-based stock selling even helped pushed the Nikkei down as salarymen rushed to dump stock in livedoor, an internet company whose CEO is now awaiting trial for securities fraud. Then there's the impact on dexterity as kids grow up using their thumbs to type into their handsets at speeds of 100 characters a minute often using new variations on Japanese which save time and make it almost impossible for those not in the know to understand.

Still, all isn't quite lost for watchmakers, despite the paradigm-shifting competition. One answer is to move upmarket. While shipments of watches in Japanare a third of what they were a decade ago, last year total sales actually rose 8% to $5.5 billion, reports the Nikkei Keizai. The reason: those that are buying watches are opting for (often pricey) imports, which account for 70% of the total value of sales.

Another is to complement the keitai (as the mobile is known in Japan). On Friday, watchmaker Citizen launched a new watch called the i:VIRT (pictured above). Using Bluetooth technology, the phone vibrates when its owner's mobile phone rings. That sounds pretty useful, particularly on trains where phones must be switched to "manner mode" with the ringer switched off. Still, one can't help thinking Japan's watchmakers are fighting a losing battle. Perhaps it's time to add a star gazing function.

Before it's here, it's on the Bloomberg Terminal.