Like Houdini escaping hand cuffs: watches replaced by mobile phones

We've reported on this phenomenon on an anecdotal evidence level - and we discuss it in our book of course. But now the first true study has been released on the wristwatch industry and mobile phones. The story was covered by Business Week this week in story entitled "Time's up for watch sales in Japan" and I found it via our friend Russell Buckley over at the MobHappy blogsite.

A survey by watchmaker Seiko of Japanese consumers aged 16-49 reveals a dramatic drop in wristwatch-wearing, from a peak of 70% of the Japanese (target age) population in 1997 to only 46% today. And the Seiko study attributes this enormous fall in watch usage due to mobile phone use (and the clock feature on the phone).

First, this is of course something we've talked about and we've blogged about various tidbits relating to this, such as discussing watchmakers entering the phone space ("Watchmakers waking up to wireless") and how the phone is so much more than just a clock ("Mobile wallet and keys"). We'll continue to examine this space.

Secondly, this is yet another example of the absolute and total dominance by the mobile phone of all other digital wannabes upon the person. PDA functionality was supposed to be a huge market for the early part of this decade with double-digit growth rates for years upon years. It was, but not as PDA manufacturers had envisioned it. Stand-alone PDA sales stalled in 2001 and have been stagnant ever since. Smartphone (ie mobile phone with PDA functionality) sales have nearly doubled year-upon-year since 2000 and outsold stand-alone PDAs in 2004 at a rate of 8 to 1. What once was a leading PDA maker, Sony, pulled out of the standalone PDA market in 2004.

The exact same pattern was seen in digital cameras. By 2003 more cameraphones were sold than stand-alone digital cameras, and last year 2005 over 6 times as many cameraphones were sold as stand-alone digital cameras. As we've reported, the world's bestselling digital camera brand is now Nokia. And yes, in January 2006, the second largest cameramaker Minolta-Konica, announced it is quitting the digital camera business.

We blogged about the next battle being that of the stand-alone MP3 player (ie iPod) vs the musicphone, and this battle is all but over in 2006. Apple will be releasing its quarterly data this week and I'll blog about the carnage then, but the mobile phone runs from crushing victory to crushing victory.

And now we have the phone vs wristwatch battle. As Nokia's survey of over 5000 consumers around the world revealed, 73% of us are using the phone as our watch, and 72% use the phone as our alarm clock. Now the Seiko study proves the point (as far as I can see, for the first time ever) from the "other side" as a survey of wristwatch-wearing.

Note that as Japanese consumers age 16-49 have lowered wristwatch usage from 70% to 46% it reflects a real market drop of one third. A whole one third of the wristwatch-wearing population in gadget-crazy and status-aware Japan, have abandoned the wristwatch totally. We as a society are doing that Houdini magic trick - after a century of being held captive by the hand-cuffs of the wristwatch, we've finally been uncuffed and now prefer the phone.