Switzerland’s exports are shrinking because of the Apple Watch

Swiss watchmakers were struggling well before the rise of smartwatches, but the release of the Apple Watch caused the market to suffer its largest decline in six years. According to the Swiss customs office, the number of mechanical watches shipped to the United States has dropped by 12% thanks to the Apple Watch, while shipments by other countries declined by a whopping 40%. Considering how watches account for around 10% of Switzerland’s exports, this is bad news.

Swiss watchmakers woke up to news of another steep decline Thursday, as October shipments of mechanical watches declined 12 percent to $2 billion, the largest decline in six years. The new report, released in a statement from the Swiss customs office, showed total Swiss Watch exports to the U.S. dropping 12 percent. The country with the most pronounced drop-off was Hong Kong, whose share of shipments dropped just under 40 percent. Traditionally a huge marketplace for Swiss watches, weak demand has led to declining sales from high-end Swiss manufacturers like Richemont, while others like TAG Heuer have closed stores in the country this year. Swiss Watch sales are said to make up one tenth of the country’s total exports, which have declined 3.2 percent over the first ten months of this year. The news follows similar drop-offs over the course of this year, including an 8.5 percent drop-off last quarter, which was reported last month.