The Quartz Crisis and the Swiss Watch Industry

Statistics in the watch industry exist in two separate sets: how many watches were made, and how much money was earned from them. Usually, these two sets of numbers point in roughly the same direction—make more, earn more. Watches are different.

Ranked by wristwatch export volume in 2025, China takes an overwhelming 1st place with 589.5 million units. Hong Kong follows with 94 million, Switzerland with 14.6 million, Germany with 12.1 million, and the United States with 11.2 million. Switzerland sits in 3rd place, far behind 2nd-place Hong Kong and barely ahead of Germany and the United States right beneath it.

Line up the same year by export value, and the ranking flips completely. Switzerland ranks 1st with $30.8 billion, followed by Hong Kong with $6.3 billion, China with $4.9 billion, and France with $3.3 billion. A country that exported just one-fortieth the volume of China outearns China by more than six times.

The explanation takes just a single line: the average export price per watch is $2,018 for Switzerland and $4 for China. That is a difference of about 500 times. Because this is a market where volume statistics and value statistics give polar opposite answers, your conclusion flips entirely depending on which numbers you cite.

There is an important detail to clarify here. All these figures are export prices. They represent the values declared at customs, not retail prices paid by customers in stores. The Federation of the Swiss Watch Industry (FH) explicitly notes that its statistics do not reflect final consumer retail sales. Watches sold domestically within Switzerland and secondary-market transactions are not included here either. So "the size of the Swiss watch market" and "Swiss watch export value" are two very different things.

Switzerland’s share of global watch production volume is often cited as roughly 2%. The rest consists of items selling for just a few dollars apiece—which are, without question, watches too. Yet when we think of the "watch industry," the picture that comes to mind is almost always that 2%. After all, that is what appears in advertisements and behind the glass displays of luxury department stores.

This bizarre structure did not exist from the start. Before quartz watches arrived, Switzerland was said to command about half of the global watch market. Historical sources are unclear whether that meant volume or value, but back then, the two metrics certainly did not tell such divergent stories. What we see today is the scar left behind after a total collapse. It has a specific era when it was formed, and an event that forged it.

When you apply an electric current to a piece of quartz crystal, it vibrates at a remarkably steady rate. Counting those vibrations to track the seconds is how a quartz timepiece works. A mechanical watch, by contrast, relies on the unwinding force of a mainspring to oscillate a balance wheel back and forth. But that oscillation wobbles slightly with changes in temperature, how the watch is oriented, or the drying of lubricating oil. Quartz vibrations are far less sensitive to such conditions. At the same price point, that translates to incomparable accuracy.

The first place to turn this concept into a physical object was not a watchmaker. In October 1927, Warren Marrison and J.W. Horton at Bell Telephone Laboratories built a device that kept time by making a block of quartz vibrate 50,000 times per second. It was room-sized laboratory equipment, miles away from anything you could strap to a wrist.

This leads to a very common point of confusion: quartz clocks and quartz wristwatches are completely different things. According to Seiko's official account, even in the late 1950s, the quartz clocks used by broadcast stations were larger than a large bookcase. Making an accurate clock and fitting that accuracy onto a wrist were entirely separate challenges. Between the two achievements lay a span of over 40 years.

Meanwhile, attempts to harness electricity were also underway in wristwatches. In 1957, Hamilton released the "Electric 500." It was not quartz; instead, a battery drove the balance wheel. Then, in October 1960, Bulova launched the "Accutron." Powered by a transistor circuit that vibrated a 360 Hz tuning fork, it guaranteed an error within 1 minute per month—about 2 seconds a day. It was the first consumer product to push past the limits of mechanical timekeeping using electronics.

Sources still disagree over which one deserves the title of the "world's first electronic wristwatch." Some point to the Hamilton Electric, while others choose the Accutron. The very fact that this debate persists reflects the mood of the era. Multiple companies across several nations were pushing forward in the same direction all at once.

Preparations were also underway in Japan. It is said that in 1959, Seiko embarked on quartz wristwatch development under the code name "59A." Because this project name and starting year come from later historical accounts rather than official Seiko documentation, it is hard to say for certain. What is certain, however, is that a Japanese company was pouring its efforts into shrinking a bookcase-sized machine down to the size of a wrist.

The roots of Swiss watchmaking go back very far. According to the FH, when the Protestant reformer Calvin banned the wearing of jewelry, Geneva's goldsmiths switched to watchmaking, and a watchmakers' guild was established in 1601. Since this is an origin story the industry loves to tell, it is best treated as lore rather than strict fact. What is certain is the outcome. By 1790, Geneva was already exporting more than 60,000 watches a year.

The real reason Switzerland stayed ahead for so long lay in its production method: a division of labor called établissage. Instead of a single artisan crafting an entire watch, specialized workshops divided up the parts, and final assembly took place at the end. Countless small workshops scattered across mountainous regions formed a unified industry. Later on, this very structure would come back to hold them back.

There was also an official arena for measuring accuracy: chronometer competitions held by the observatories in Neuchâtel and Geneva. These contests ranked watches by measuring how many seconds a company's watch deviated per day, serving as both the pride and the technological benchmark of the Swiss watch industry.

And here is where the common myth falls apart. Switzerland did not lose because it was ignorant of quartz. In the early 1960s, an electronic watch research lab called the CEH was established in Neuchâtel. It was a consortium jointly funded by about 20 Swiss manufacturers, with the explicit goal of developing a 'quartz wristwatch.' Because founding dates vary slightly across sources, it is safest to simply say the early 1960s.

The research took 6 years. The result was 'Beta 1.' It was a prototype that packed a quartz oscillator vibrating at 8,192Hz and a custom-developed integrated circuit into the size of a wristwatch. Wikipedia records its completion as 1966, while the official FH timeline lists 1967. With the two records diverging, let us say between 1966 and 1967.

What happened next is the core of this chapter. At the 1967 Neuchâtel Observatory competition, the winning watch was the Swiss CEH quartz prototype 'Beta 2.' Its daily deviation was 0.003 seconds. Since top-tier mechanical chronometers of the era had daily deviations of 3 to 10 seconds, this was a difference of more than 1,000 times. At the very same competition, Seiko placed 2nd and 3rd.

The following year, the order reversed. At the 1968 Geneva Observatory competition, Seiko took 1st place with 58.19 points, shattering all previous records. It was a position Switzerland had held for over 100 years. Placing the two contests side by side makes the picture clear. Switzerland and Japan surpassed each other on the same stage, using the same technology, just 1 year apart. Up to this point, the contest was not yet decided.

The year 1969 was also the moment mechanical watch technology reached its zenith. On January 10, Zenith unveiled the "El Primero." It was the world's first high-frequency automatic chronograph movement, pushing mechanical engineering about as far as it could possibly go.

On December 25 of that same year, Seiko launched the "Quartz Astron 35SQ" in Tokyo. It was the world's first commercial quartz wristwatch. Driven by a quartz crystal vibrating at 8,192Hz, it guaranteed an accuracy of ±5 seconds per month. That amounted to just 1 minute a year. Seiko advertised this as being about 100 times more accurate than mechanical watches.

The price was 450,000 yen. In Japan at the time, that was enough to buy an entire car. The initial limited run of 100 units, crafted in 18K gold, sold out within a week. For those who demanded a truly precise timepiece, the price of a car was still not too high a price to pay.

Yet the most critical decision in this story was made on paper rather than inside the watch. Seiko chose not to monopolize its quartz patents, deciding instead to make them open. That is how the company's official history records it. They had built the most accurate watch on Earth, and then opened the blueprint to their competitors.

The results followed in just a few short years. On May 6, 1970, Hamilton announced the "Pulsar," an electronic digital watch with no hands at all. In 1971, Girard-Perregaux released a movement vibrating at 32,768Hz. There was a clear reason for this number: 32,768 is 2 multiplied by itself 15 times, which means a simple circuit only has to divide the frequency in half 15 times to produce exactly 1 second. It was high enough to be completely silent to the human ear while drawing very little battery power. Today, virtually every quartz watch runs on this exact frequency.

In 1973, Citizen launched its first quartz wristwatch. Then, in November 1974, Casio released the "Casiotron." Casio was an electronic calculator company that had never built a watch in its existence. Applying its calculator semiconductor technology directly to the timepiece, it featured a digital calendar that automatically adjusted for longer and shorter months. It was the moment watchmaking no longer required a watchmaker.

In 2004, the Seiko Quartz Astron was registered as an IEEE Milestone, officially recognized as a historic turning point in the history of technology. Seiko itself, however, would soon pay the price for opening that door. Once a market is thrown wide open, you are never the only one stepping inside.

Switzerland wasn't just sitting idly by. At the 1970 Basel Fair, the quartz movement "Beta 21," developed by the CEH, was officially unveiled. Prestigious names like Omega, Rolex, Patek Philippe, and IWC shared this movement. Because different sources provide slightly different member lists, it is most accurate to say about a dozen brands took part.

The real issue was the production volume. Between 1970 and 1971, the total number of Beta 21 movements made was only about 6,000. An 18K gold model of the "Electroquartz" built by Omega with this movement was sold in the UK for 1,150 pounds. Switzerland treated quartz not as a cheap and ordinary item, but as a new component for luxury watches. During that exact same period, Japan had already pivoted to full mass production.

So the claim that "Switzerland rejected quartz" is not entirely accurate. A phrase closer to the truth is that they produced it on a tiny scale. It wasn't that they couldn't make it, nor that they threw it away; they simply crafted it exclusively as high-end goods on a scale of a few thousand units.

Why did this happen? Think back to the établissage structure mentioned earlier. Different workshops crafted separate components, and each brand assembled them in distinct combinations. That setup was ideal for an object with hundreds of hand-finished mechanical parts. But quartz watches demanded the exact opposite. Success required stamping out identical circuits, identical batteries, and identical modules in astronomical volumes. Nicolas Hayek later noted that one Swiss watch conglomerate oversaw more than 100 companies, each handling its own marketing and assembly—calling the entire setup pure madness.

It is difficult to pinpoint exactly when the reversal occurred. It is often cited that quartz overtook mechanical watches in 1978, but it remains unclear in which market, or whether that was measured by volume or by value. Other sources record the turning point within Switzerland as falling between 1979 and 1980. Whichever the case, it happened within 10 years of the Astron's launch.

The manufacturing stage moved as well. Hong Kong manufacturers, who had been making cheap watches and spare parts since the 1960s, entered quartz production in the 1970s. Around the same time, even some Swiss watchmakers relocated part of their factory operations to Hong Kong. The world of watches costing just a few dollars apiece was born right then.

Even the pioneer who opened the door was no exception to this shift. Seiko, having made its technology publicly available, soon lost the low end of the market to ultra-budget quartz from Hong Kong and China. In exchange for opening the market, they effectively lost the bottom of it. Once the recipe was out in the open, whoever could churn them out at the lowest cost took over the entry level.

The numbers collapsed with breathtaking speed. The official FH page notes that Swiss watch industry employment plunged from about 90,000 in 1970 to the 30,000s by 1984. In a little over a decade, two out of every three jobs were gone.

These figures must be handled with care, as sources vary. Wikipedia's 'Quartz crisis' entry notes that employment shrank from 90,000 to 28,000 between 1970 and 1988, while another entry states that it stabilized from about 70,000 in the mid-1960s to 30,000–35,000 in the 1980s. The baseline years differ, and so does the definition of what counts as part of the watch industry. While the overall trajectory is the same, if you take the numbers out of context without noting which source or time frame they come from, you quickly end up with an inaccurate sentence. The number of companies tells a similar story. Wikipedia's 'Quartz crisis' entry records a drop from 1,600 companies in 1970 to 600 in 1983, and the FH also cites 1,600 companies in 1970. Yet an employers' association census counted around 2,400 enterprises in the mid-1960s—a far higher figure. What gets counted as a watch company varies from one source to the next.

Switzerland was not the only casualty. In 1962, one out of every three watches sold in the United States was a Timex. Facing the onslaught of Japanese quartz, the company slashed its workforce in the 1970s from 30,000 to 6,000. If we portray the Quartz Crisis merely as a duel between Switzerland and Japan, the United States is left out of the picture entirely.

Inside individual companies, the drama ran even deeper. In 1975, Zenith management decided to drop mechanical chronographs in favor of quartz and ordered the production tooling for the El Primero scrapped. This was the very movement hailed as the pinnacle of watchmaking just six years earlier. As the story goes, a watchmaker named Charles Vermot hid the tools and blueprints in the factory attic. While widely told as brand lore and difficult to verify in every detail, multiple sources agree on the broad strokes: the order to destroy the equipment was indeed given, and years later, the movement was brought back into production using those very tools.

The heart of the industry ground to a halt as well. In 1930, Omega and Tissot merged to form SSIH, and the following year, ASUAG was founded to bring movement and parts manufacturers under one roof. These two giant groups were the twin pillars of the Swiss watch industry. In 1982, ASUAG went financially bankrupt, and SSIH was already teetering on the edge of insolvency.

Swiss banks resolved to wind up the two companies and looked for a consultant to conduct due diligence. The man called in for the task was Nicolas Hayek.

The seeds of revival were already growing before Hayek arrived. In 1978, Ernst Thomke took over the management of ETA, the movement maker. He argued that the Swiss movement companies had to end their infighting and consolidate if the industry was to survive, and in 1982, he became the CEO of Ébauches SA.

Under Thomke, two engineers designed a strange watch: Elmar Mock and Jacques Müller. What they created was less a design and more a manufacturing process. They slashed the number of parts to 51, and instead of building a separate movement to insert inside, they assembled it directly into the case to churn it out on an automated production line. It completely reversed the way Switzerland had done things for more than 200 years.

On March 1, 1983, the first Swatch was unveiled in Zurich. The price ranged from 39.90 to 49.90 Swiss francs, unified to 50 francs that autumn. The name stood for "second watch." The proposition was that it was not an item you wore alone forever, but something you switched out like clothes. It was also a declaration to give up competing on accuracy and compete on price and fun instead.

Meanwhile, Hayek offered a different answer instead of a liquidation report. His recommendation was to merge the two companies. In 1983, ASUAG and SSIH merged. Then in 1985, an investor group led by Hayek directly acquired a majority stake in the merged company, and he became Chairman of the Board. The man brought in to oversee liquidation ended up buying the company. The acquisition price has never been officially disclosed.

The company's name changed to SMH in 1986, and to the Swatch Group in 1998. The two men held different posts. The merged company's first CEO was Thomke, who led management from 1984 to 1991. Hayek set the direction as Chairman of the Board and largest shareholder, and only took over executive management after Thomke left. The team that created Swatch belonged to Thomke's side, while the man who bought the company and steered its course was Hayek. Here comes the strangest twist in this story: the marquee name of the entire group commanding Omega and Breguet became that of a cheap plastic watch. In 2025, the group's consolidated revenue was 6.28 billion francs, with 31,800 employees.

During the same period, Japan went in the exact opposite direction. In April 1983, Casio launched the G-SHOCK DW-5000C. With a urethane bumper, a 5-layer shock-absorbing structure, and 200m water resistance, it completely overturned the assumption that watches were fragile. While Switzerland pivoted toward cheap, lightweight fashion, Japan headed toward unbreakable toughness in rough conditions. Casio's F-91W, released in June 1989, is known to have reached cumulative production of 100 million units.

Hayek passed away on June 28, 2010, at the Swatch Group headquarters in Biel.

That equipment, once rumored to be hidden away in an attic, made its return. In 1988, Rolex began outfitting the Daytona with Zenith's El Primero movement. This supply partnership continued until 2000. A mechanical movement once ordered to be scrapped had become the beating heart of a luxury watch roughly a decade later.

This was not a mere retro fad—it was a complete change of sport. Once quartz made precision available for just a few dollars a piece, mechanical watches had no way to win a race for accuracy. So they shifted toward an entirely different set of values: handmade craftsmanship, limited production, storied heritage, and what wearing one says about who you are. It changed from an object that sells precision into one that sells a story.

The numbers illustrate this pivot with striking clarity. In 2000, Switzerland exported 29,656,000 wristwatches, earning 9.27 billion francs. In 2025, it exported 14,594,000 wristwatches, earning 24.4 billion francs. The quantity halved, yet the revenue grew 2.6 times. The industry didn't merely recover; it transformed into an entirely different business.

If you look at mechanical watches alone, the picture gets even more surprising. In 2000, Swiss exports of mechanical wristwatches stood at 2,476,000 units. By 2025, that number reached 5,208,000 units. The mechanical watch, once declared dead in the face of quartz, subsequently more than doubled in volume.

Does this mean Switzerland abandoned quartz? Not at all. Out of the 14,594,000 wristwatches Switzerland exported in 2025, 9,386,000 were quartz. In unit count, quartz still holds the majority at 64%. However, while those 9.38 million units brought in 3.5 billion francs, the mere 5.2 million mechanical watches brought in 20.9 billion francs. In terms of value, mechanical watches accounted for 86%. This explains why you get two diametrically opposed statements depending on whether you look at volume or value.

In 2023, Swiss watch exports reached an all-time high of 26.7 billion francs. Keep in mind, however, that this figure represents the watchmaking industry total—combining finished watches, movements, and components—so it should not be compared directly against the 24.4 billion francs for wristwatches alone. Even when statistics share the same title, their scopes can differ.

At the summit of this landscape stands Rolex. However, because the company is privately owned by a foundation, it discloses neither its production volume nor its revenue. Every figure circulating in the market is an outside estimate. According to estimates by Morgan Stanley and LuxeConsult, its 2024 production was 1,176,000 units, its share of the luxury watch market was 32%, and its revenue reached 10.5 billion francs. This is a set of numbers that must never be stripped of the label "estimate."

When the Apple Watch was released on April 24, 2015, talk surfaced that the 1970s might be repeating themselves. After all, another rival for the wrist had emerged from an electronics company. But about 10 years later, the numbers paint a somewhat different picture.

In 2024, Swiss watch exports fell by about 3% in value and 10% in volume. That meant about 1.5 million fewer watches were sold. Yet the drop wasn't evenly distributed. While export value for watches priced under 3,000 francs dropped by 16%, the high-end tier actually saw value rise by 1%. The segment smartwatches actually collide with isn't luxury mechanical watches, but cheap quartz watches.

The industry itself sees it that way too. When Deloitte surveyed Swiss watch industry executives in 2025, 68% described the impact of smartwatches as 'neutral.' While one must keep in mind that this is an internal industry sentiment survey, the temperature is unmistakably different from the terror of the 1970s.

Signals from consumers, however, are less comforting. In that same survey, the share of respondents who said they 'wear a traditional watch' plummeted from 46% in 2020 to 26% in 2025. Because this was an online poll of 6,500 people across 13 markets, it reflects response rates rather than actual wearing rates, but the trajectory is clear: the default setting for the wrist is shifting.

Interestingly, the smartwatch landscape isn't stable either. According to estimates by Counterpoint Research, global smartwatch shipments in the second quarter of 2026 fell by 4% compared to a year earlier, and Apple surrendered the top spot with a 20% market share to Huawei (22%). Because Apple does not disclose Watch unit sales, every market share figure in this space is a research firm's estimate.

Placing two numbers side by side shows where the industry is currently focusing its gaze. While 68% of executives called the impact of smartwatches 'neutral,' tariffs loom over their largest market, the United States. A US tariff on Swiss-made goods, announced at 31% in April 2025, took effect at 39% starting August 7 of that year. The US surpassed China in 2021 to become the largest market for Swiss watches. In 2024, exports to the US totaled 4.4 billion francs, representing 16.8% of the total.

As a result, recent statistics swing dramatically. In 2025, Swiss watch exports fell 1.7% to 25.6 billion francs, marking a second straight year of decline. Then, in July 2026, single-month exports jumped 9.6% to 2.6 billion francs, turning the seven-month cumulative total positive. Because monthly statistics update every month, this sentence will soon grow dated. That is precisely why timeframes and reference points must always accompany the figures.

There is no need to predict the future. Instead, guided by the rules this story has revealed, let’s summarize where to look if you want to be the first to notice the board shifting.

First, watch the budget tier. In terms of unit volume, 64% of wristwatches exported by Switzerland are still quartz. And the segment that directly overlaps with smartwatches is not mechanical luxury, but this very tier of affordable quartz. If the bracket under an export price of 3,000 francs continues to shrink, the gap between volume and value will widen further. That means the Swiss watch industry is becoming an increasingly smaller and more expensive industry.

Second, tariffs. As of August 2025, the tariff rate applied to the US is 39%, and the US is the largest market for Swiss watches. The outcomes of trade negotiations show up immediately in the following month's export statistics. Right now, this is the number that changes most frequently in watch news.

Third, the invisible infrastructure. Miyota, a Citizen affiliate, is known to produce about 100 million movements a year, and more than 90% of them are quartz. Based on 2023 data, this single company's component production is about seven times the total wristwatch export volume of all of Switzerland. In fiscal year 2026, Casio earned 184.966 billion yen in its timepiece division, accounting for about 67% of the company's total sales. Those who disrupted the old order have not disappeared; they form the bedrock beneath the industry.

Fourth, people. As of September 30, 2025, there were 64,807 people and 685 enterprises in the Swiss watch and microtechnology industries. This was down from 65,642 the previous year, marking the first decline since COVID-19. However, this count includes not only watches, but also precision machining such as medical devices and automotive components. The yardstick is completely different from the 90,000 workers in 1970, so you shouldn't line them up and do simple subtraction.

And finally, one more thing. In this story, the side that was pushed out was not defeated because they lacked the skill to make it. Switzerland won the quartz competition first and developed a commercial movement with its own hands. But they produced only 6,000 units of that movement, the Beta 21, over two years strictly for luxury brands, ultimately ceding the market to those churning them out by the millions. And after the collapse, they shifted where the money is made from accuracy to storytelling. They did not stop making quartz watches; rather, while still exporting far more quartz watches by volume, they came to earn their money from mechanical ones. That is how, with just one-fortieth the volume, Switzerland took the number one spot in export value.

We must not forget the other side either. What the victors took was a world of a few dollars per unit. In exchange for making precision universal, accuracy itself lost its premium. To make money on that side, there was no choice left but to produce those few-dollar movements by the hundreds of millions, just like Miyota.