It has been a little over 40 years since engineers in Switzerland, Japan and the United States reinvented the wrist watch by using quartz technology.
At the time, this reinvention created what is commonly referred to by watchmakers as The Quartz Crisis. To get a grasp of how this crisis developed, we will take you through the history that created its path.
Tracing The History of the Quartz Crisis
It was during the time of World War II that Switzerland’s neutrality allowed them to make consumer timepieces for military use. Because of this, the Swiss enjoyed a monopoly in the watchmaking marketplace that was very well protected. During the war, Switzerland controlled nearly 90 percent (!) of the world’s watchmaking market.
Shortly after the war, a Swiss engineer named Max Hetzel developed a watch that utilized an electronically charged tuning fork. This tuning fork was powered by a 1.35 volt battery, and it powered the hands of the watch through the use of an electromechanical gear train. The watch was named the Accutron, and it was manufactured by Bulova in 1960. However, it was not the only battery powered watch. There was a joint venture in the early 1950s between the Elgin Watch Company and Lip of France that also produced an electromechanical watch. This watch was powered by a small battery instead of an unwinding spring, and it laid the groundwork for the quartz wrist watch.
The Accutron was still a powerful catalyst because the Swiss watch industry enjoyed a well-established global market. The Swiss had successful patterns of manufacturing, marketing and sales that were unmatched by any other nation. However, when quartz technology was eventually developed by Swiss engineers, the Swiss watchmaking industry largely rejected the idea of developing the quartz watch for manufacturing.
Shortly after the Swiss invented the quartz watch, the Seiko Corporation of Japan made the decision to develop quartz technology. Other countries were also keenly interested in the development of the quartz watch.
Although many countries were excited about this new quartz watch, the transition from mechanical watches to electronic timekeeping certainly wasn’t a smooth one, and it was not done with just a few quartz watches. The quartz watch met with a different type of reception at every turn along its way to success. Watchmaking trade journals and the press of the early 1970s indicate that the industry wasn’t really sure what to make of these new watches. Many people saw quartz watches as novelty items. They predicted that if they were to survive at all, they would occupy a very small percentage of the marketplace.
American semiconductor companies became tempted by the prospect of quartz watches. Texas Instruments, National Semiconductor and Fairchild were a few of the companies that entered the watch market with their own products. The very first quartz watch with an analog display (as opposed to a digital clock display) and an integrated circuit was introduced in 1970 by Texas Instruments.
Quartz watches swiftly gained in popularity, and they eventually surpassed the popularity of mechanical watches. These new quartz watches were inexpensive and accurate. Unfortunately, this plunged the Swiss watch industry into a complete crisis. The failure of the Swiss watchmaking industry to innovate created an economic turmoil throughout their industry. As a result, many profitable and famous Swiss watch companies became insolvent or were forced to close their businesses. This mistake reduced the Swiss watchmaking industry by 66 percent, and the time period became known as the Quartz Crisis.
In 1974, about 40 companies were producing these watches on a massive scale. The competition among the different companies that made quartz watches quickly brought the prices down. This created a price war. These inexpensive electronic watches began to flood the market.
During the height of the price wars, the Hamilton Watch Company became a casualty of the quartz revolution. Hamilton sold their watch company to the Swiss in 1974. Their Pulsar watch division called Time Computer continued until they sold it in 1977. An American jewelry firm bought the company and sold the name of their Pulsar watch to Seiko in Japan.
Why the Swiss Failed to Develop the Quartz Watch
Despite its head start in the quartz watch revolution, the Swiss watch industry was slow to respond to the quartz watch craze. But why?
The Swiss were too wedded to long standing practices of customer service and trained repair personnel. The industry relied on the Swiss for their leadership in mechanical watches. The mechanical watches carried them along while they tried to fit old ways of conducting business with the new technology that was exploding in the marketplace. Unfortunately, this caused their market share to drop from 30 percent to 10 percent in the amount of units sold in the world marketplace. A worldwide economic recession, severe international competition and technological changes forced the Swiss watchmaking industry to make structural changes. In response, they came up with a new product that helped them to capture some of the market share. The new watch was called the Swatch.
In 1982, the very first Swatch prototypes were launched. They were created to recapture the entry level market share that was lost by Swiss manufacturers during the growth of companies such as Seiko. The Swiss wanted to make analog watches popular once again. In 1983 the new Swatch was marked by bold styling and a new design. The quartz watch was redesigned for efficiency, and it contained fewer parts. This new watch restored Switzerland as the major player in the watchmaking market. The experience of manufacturing and marketing that the Swiss had done so well in the past put them at the head of the watchmaking market once again. They used synthetic materials for the case of the Swatch. Additionally, they used a new ultra-sonic welding process and assembly technology. The components of the watch were reduced from 100 to 51 without losing any of the watch’s accuracy.
The Quartz Crisis Wasn’t the First Crisis
Ironically, the Quartz Crisis was thought to be the second technological crisis in the watchmaking industry. The first crisis began in 1876, and it occurred during the same time of the American Centennial Exhibition, which was held in Philadelphia. During this event, American manufacturers showed off the fruits of their watchmaking labor. Among many of Switzerland’s attendees, an engineer named Jacques David was there to see the exhibition. David reported to the Swiss watchmakers that the Americans were technologically advanced. They believed they were surpassing the Swiss by their innovative manufacturing capabilities.
The Swiss manufacturers were hindered by their piece-by-piece production system. The American watch producers brought together the entire production of their watchers under one roof. The system the Americans had employed machine made parts that were standardized, and they used improved machines and tools. This caused the Swiss to be concerned that the Americans could reach a higher level of precision than the Swiss had reached. The American chronometers were superior and it sent the Swiss back to improve their manufacturing process. Not much more is known about this first crisis other than it sent the Swiss back to improve an inferior production process to keep up with the innovation of industrialized America.
Obviously, they were successful, because they continued to hold their grasp on market share at this time.
Could a Third Clock-Making Crisis be on the Horizon?
A man named Nicholas Hayek has predicted a third crisis.
Hayek is thought to be one of the saviors of the Swiss watch industry after the Quartz Crisis. He believes that there could be another crisis in the Swiss watch industry unless there is additional innovation and investment. When Hayek pushed the manufacturers to begin to do new production, he was met with resistance. He believes that the lack of innovation has reduced quartz technology to a standstill. The failure to advance to the next level of quartz innovation is predicted by Hayek to cause another crisis. Could he be correct?
The State of Clock-Making Currently
Today, most people use their smartphones to check the time when they are away from home. Thankfully, many of you who use computers also use Online Clock. Wrist watches seem to have become less relevant. Quartz technology has come a long way, and it’s good to look back into history and understand the long process of arriving at so many new advancements in timekeeping. As the world’s first online alarm clock, we are certainly appreciative of all that is currently available to keep time. After all, what could be cooler than setting alarms and timers on your computer?
Looking back at the history of clock-making can help us to appreciate what innovation and a healthy marketplace competition can create.
Just imagine how expensive a good wrist watch that keeps the precise time would be today if the quartz craze had never happened !
The watchmakers of Switzerland made the amazing contribution of quartz technology to the watchmaking industry. Kudos to Switzerland, the innovators of the United States and Japan for all figuring out how to mass produce this marvel of timekeeping.
That’s all the timekeeping history we have for you today. If you would like to discuss the Quartz Crisis, or if you want to take part in a bit of social media fun, you can find us on Twitter, Facebook and Google+.