n 1927, the global watch industry was in the midst of a period of strong growth. After the brief but violent conversion crisis that followed the end of the First World War, the world economy had entered a phase of considerable growth – the “Roaring Twenties” – which would soon end in the Wall Street crash and the Great Depression.

Despite the emergence of large watchmaking companies in the United States, Germany and Japan, Switzerland maintained its domination of the world market: almost one in two watches produced around the world came from a Swiss factory. The Swiss watch industry was at the height of its power. That year, it exported more than 18.5 million watches (including bare movements). For several years, the industry had been experiencing a growth dynamic that gave reason to hope for a return to the peaks of the mid-1910s, and continuing expansion.

However, growth was not synonymous with stability. In the mid-1920s, two phenomena were to profoundly transform the competitive landscape of the world watch industry: the advent of the wristwatch and the emergence of new competitors outside Switzerland.

Swiss watch exports, 1885-1930

For several years, the industry had been experiencing a growth dynamic that gave reason to hope for a return to the peaks of the mid-1910s and continuing expansion. (Source: Swiss foreign trade statistics)

A marketing innovation: the wristwatch

The year 1927 marked a major change in terms of products and markets: the transition from the pocket watch to the wristwatch. The latter represented 40% of the volume of Swiss watch exports. They were still in the minority, but the transition that began at the turn of the century was inexorable. There was no going back.

Rather than debating the insoluble question of who invented the wristwatch, we shall look at the significant paradigm shift that took place during the interwar period. Between 1920 and 1940, the proportion of wristwatches rose from 25% of total Swiss watch exports to 85%.

The change was not merely technical and industrial: it was primarily about marketing. Watch manufacturers invented new markets: the ladies’ watch, and the affordable watch for everyday use. For the former, the watch became a fashion accessory. It no longer served solely to tell the time but was displayed on the wrist.

Everyday watches were also increasingly popular, as the figures for Swiss exports by metal type show. Until 1927, the share of wristwatches made of precious metals (platinum, gold and silver) was equal to that of steel and nickel products. However, after this date, the volume of wristwatches made from precious metals collapsed (to less than 5% in 1935) and the volumes of steel and nickel timepieces grew tremendously. A large proportion of this latter category was made up of Roskopf watches, which were simple, inexpensive mechanical timekeepers. The transition to the wristwatch was therefore based on the democratisation of consumption.

This change in the nature of the product posed a major challenge for watchmakers. In Switzerland, manufacturers benefited from the flexibility of their suppliers, who could quickly launch new types of calibres and cases onto the market, ensuring that adaptation was relatively easy. On the other hand, the large American manufacturers, who at that time exercised a virtual monopoly on their domestic market, were slow to grasp this change in demand. Waltham Watch, the main American company, remained focused on pocket watches for a long time, and this lack of adaptability was a factor in its filing for bankruptcy in 1949.

Era Watch advertisement, 1927

Watch manufacturers invented new markets: the ladies’ watch and the affordable everyday watch. For the former, the watch became a fashion accessory. It no longer served solely to tell the time, but was displayed on the wrist. (Source: Indicateur Davoine, 1927)

Reactions to democratisation

The mass consumption of wristwatches was not, however, a general phenomenon. Some companies sought to stand out from this general trend and strengthen their positioning as a luxury brand. The Geneva manufacturers Patek, Philippe & Cie and Vacheron & Constantin refused to standardise their products by using mass-produced blanks. They pursued a model of technical excellence and niche products in order to distinguish themselves from the “junk watches of La Chaux-de-Fonds”, as François Antoine Conty, one of the directors of Patek, Philippe & Cie, stated in 1926. However, these manufacturers were small family-run businesses that were becoming an increasingly niche part of the watch industry.

The main innovation in luxury watchmaking came from Montres Rolex SA, founded in Geneva in 1920 by Hans Wilsdorf. In the 1920s, the brand developed an innovative model in collaboration with the Aegler movement factory in Biel: industrial production of high-quality wristwatches. In 1926, Rolex applied for a patent for a hermetically sealed watch case, which became known as the Oyster.

Advertisement for the Rolex Watch factory, Biel

In the 1920s, Rolex developed an innovative model in collaboration with the Aegler movement factory in Biel: industrial production of high-quality wristwatches. (Source: Indicateur Davoine, 1927)

On this basis, Wilsdorf launched a number of activities. First of all, there was enormous growth in advertising. On 24 November 1927, Rolex published a full-page advertisement in the Daily Mail, Britain’s leading conservative daily newspaper, introducing its Oyster model as “the wonder watch that defies the elements.”

In addition, the Aegler factory committed to improving its processes in order to guarantee industrial production of high-precision movements, which were registered with the “Bureau de Contrôle des Montres” in Biel. The proportion of watches that obtained an operating report with a ‘mention’ rose from just 10.8% in 1926-1927 to an average of 63.1% in 1932-1937. Finally, in 1927, the Biel factory hired one of the best independent adjusters in the city of Biel, Jean Matile, to run an in-house chronometry department.

Advertisement for the Rolex “Oyster”, 1927

On 24 November 1927, Rolex published a full-page advertisement in the Daily Mail, introducing its Oyster model as “the wonder watch that defies the elements.” (Source: Rolex)

Emergence of new competitors

The industrialisation of watch production was not limited to Switzerland, however. The United States, Germany and Japan were the main nations whose watch industries were growing strongly, at a time when Great Britain’s watch industry had collapsed, and its counterpart in France was facing serious difficulties. The two pillars of this industrial growth were the creation of large companies, and the use of technologies imported from Switzerland (watch components and machine tools). In Germany, for example, the mega-merger between Junghans and two other firms in 1927-1928 created the world’s largest clock factory and a major watch producer. In Japan, Hattori & Co, which produces Seiko watches, built an ultra-modern factory after its old premises were destroyed in the earthquake of 1923. It employed around 2,000 people in 1927.

The technological dependence on Switzerland can be clearly seen in the structure of watch exports. The share of movements as a proportion of Swiss export volumes rose from 5.4% in 1890 to 30.1% in 1927 (see first graph). At that time, almost one watch in three was sold in the form of a movement. Final assembly was carried out in workshops opened abroad, which soon gave rise to companies that rivalled Swiss brands, such as Bulova and Citizen.

“Warning to any counterfeiter or imitator”

As shown here, on 7 December 1927, Hans Wilsdorf, Managing Director of the Rolex Watch Co. Ltd., issued a “Warning” to “any counterfeiter or imitator”. He notes that he is “the owner of the patents (...) relating to a screw-down crown device and hermetic shape boxes for life,” as well as the trademarks “Oyster, Aqua and Submarine”. He warns that he “will bring an action for cancellation of any registration or patent for similar articles, without prejudice to any damages and any action for unfair competition.” (Source: La Fédération horlogère suisse, 10 December 1927)

United States jeweller Joseph Bulova, who had set up in New York in 1875, operated a subsidiary in Biel since 1911 with the aim of sourcing watches. This subsidiary began manufacturing during the inter-war period. Between 1924 and 1929, it registered several patents in Switzerland relating to watch cases and dials, perfectly illustrating the internalisation of know-how, which was gradually repatriated to American territory. In 1930, Bulova opened an “ébauches” factory in the United States and established itself as the country’s largest watchmaking company. Other American entrepreneurs tried, with less success, to follow this model. In 1927, for example, the Gruen brothers from Cincinnati joined the board of directors of the Aegler factory in Biel, in which they had taken a share of the capital. However, this collaboration did not survive the Great Depression.

The second major company to emerge from a transfer of technology from Switzerland was Citizen in Japan. It was founded by a watch trader from Neuchâtel, Rodolphe Schmid, who had been established in Yokohama since 1894. In 1908 he opened a small watch assembly workshop, and transferred the production of cases and other components there. In 1927 the Schmid factory employed almost 200 workers and was the second largest watch company in Japan (a long way behind Seiko). Three years later, it merged with a small workshop owned by Japanese watch merchants to form Citizen Watch.

ETA advertisment for pocket and wristwatch calibres, 1927

In Switzerland, manufacturers benefited from the flexibility of their suppliers, who could quickly launch new types of calibres and cases onto the market, making adaptation relatively easy. (Source: La Fédération horlogère suisse, 10 December 1927)

Conclusion

The Swiss watchmaking establishment did not remain passive in the face of technology transfer and the emergence of competitors in other countries. In 1927, component manufacturers came together to form the Union des branches annexes de l’horlogerie (UBAH). The following year, they signed agreements with watch and movement manufacturers, seeking in particular to put an end to the exportation of parts, and to keep know-how in Switzerland. This was the beginning of the Statut horloger, a cartel organisation that regulated the Swiss watch industry until the early 1960s.