A recent open letter from Swatch Group has sparked a debate in the watch industry, challenging the findings of a widely read Morgan Stanley report. The letter, addressed to Morgan Stanley's management, takes aim at the report's data and methods, questioning its accuracy and raising some intriguing points.
The Battle of the Watch Giants: Swatch vs. Morgan Stanley
Swatch Group, a powerhouse in the Swiss watch industry, has publicly criticized the Morgan Stanley 'Swiss Watcher' report, which ranks the top 50 Swiss watch brands. The report suggested that most Swatch Group brands lost market share and that its flagship Omega brand slipped in the rankings. Swatch, however, is not taking this lying down and has fired back with a detailed response.
In the letter, Swatch Group highlights what it believes to be erroneous assumptions and findings in the report. It claims that the report's estimates of sales, production, and rankings are questionable, leading to inaccurate conclusions.
The Opaque World of Swiss Watchmaking
Here's where it gets controversial: the Swiss watch industry is notoriously secretive. Many of the biggest brands, like Rolex, Patek Philippe, and Audemars Piguet, are closely held or family-owned, making it difficult for analysts and investors to obtain precise data. This lack of transparency leaves room for interpretation and estimation, which can lead to varying reports and rankings.
Morgan Stanley, along with other banks like Vontobel, publishes industry reports based on estimated sales, production, and average prices. These reports provide insights into the industry's performance, but as Swatch Group points out, they may not always be accurate.
Swatch's Counter-Attack: Longines and Tissot
Swatch Group has disputed several key points in the Morgan Stanley report. For instance, it claims that its second-biggest brand, Longines, did not lose money in 2025 as reported. In fact, Swatch Group states that Longines reported a profit of 16.6% on net sales for that year.
Additionally, Swatch Group highlights the performance of its Tissot brand, claiming that its PRX model maker experienced a 3% growth in sales in 2025, contrary to Morgan Stanley's estimated 5% contraction.
The Numbers Game: Hamilton and Mido
Swatch Group also provides specific examples to challenge the report's estimates. For its Hamilton brand, Morgan Stanley estimated revenue of CHF 125 million on unit sales of 95,000. Swatch Group, however, states that Hamilton's unit sales are three times higher than reported and that the average retail price is significantly lower, at CHF 741 instead of the estimated CHF 2,014.
Similarly, for the Mido brand, Morgan Stanley estimated an average price of CHF 2,131, but Swatch Group claims the actual average retail price is CHF 969.
The Takeaway: A Call for Transparency
This debate highlights the challenges of estimating financial performance in an industry as opaque as Swiss watchmaking. While Swatch Group has provided specific counterpoints to the Morgan Stanley report, it remains to be seen how this will impact the industry's perception of these reports.
And this is the part most people miss: the lack of transparency in the Swiss watch industry can lead to varying interpretations and potentially misleading reports.
So, what do you think? Is Morgan Stanley's report accurate, or does Swatch Group have a point? Feel free to share your thoughts and opinions in the comments below!
