Timex

‘TIMEX WAS ON THEIR SIDE’

Is Timex taking advantage of the new Renaissance in watches?

a quick ‘memo’ for TIMEX shareholders

Notice: some of the data shown is old but my estimate is that the situation has not changed for the better but gotten worse.

http://www.wired.com/reviews/2014/03/garmin-vivofit/

How many 8 to 18 y.o kids (in NY, LA, London and Milan) and 19 to 30 y.o. people do You know that wear a wristwatch?

The bad newsI know none and probably you too!

The good newsThere is still a market for watches and it will grow in 2014 & 2015

So is TIMEX catching this opportunity?

ALAS NO!

http://www.statisticbrain.com/wrist-watch-industry-statistics/

Watch Industry Statistics DataNumber of watches sold annually worldwide 1,200,000,000Number of Swiss Watches sold annually 29,200,000Number of watches produced by China annually 663,000,000

Number of watches produced by Hong Kong annually 354,000.000

Average cost of a Swiss watch $739Average cost of a China watch $3Switzerland watch market share in terms of value 54 %

Watch Market Leaders by Sales Revenue Annual RevenueSwatch / Omega annual sales $8,880,000,000Rolex annual sales $4,500,000,000

Some figures…not too many!

20%

10%

8%

6%6%

50%

Largest Buyers of Watches by Purchased Value

Hong Kong USA China France Germany other

http://www.statisticbrain.com/wrist-watch-industry-statistics/

Wow..it seems the US is still a large mkt! That’s the good news…but it’s the only one for Timex.

http://www.statisticbrain.com/wrist-watch-industry-statistics/

Swatch Group18%

Richemont16%

Rolex12%

Fossil (USA)5%

LVMH / Bulgari (France)5%

Citizen (Japan)4%

Seiko (Japan)3%

Patek Philippe3%

Casio (Japan)2%

Audemars Piguet2%

Others30%

Largest Global Watch Manufacturers

Where is TIMEX?

Data from HKU658 Seiko watch corp. (#8095-410101756-5479) www.hbr.com

china

hong kong

switzerland

USA

thailand

france

japan

0 200 400 600 800 1000 1200

1002

713.6

25

11

6.2

5.8

5.6

main exporting countries in 2004 (millions)

HKU658 Seiko watch corp. (#8095-410101756-5479)

+5000

1500-5000

500-1500

150-500

50-150

0 500000 1000000 1500000 2000000 2500000 3000000 3500000 4000000 4500000

157000

400000

645000

4140000

1562000

US WATCH MKT BY PRICE RANGE US $

HKU658 Seiko watch corp. (#8095-410101756-5479)

+5000

1500-5000

500-1500

150-500

50-150

-10% -5% 0% 5% 10% 15% 20% 25% 30%

dollar sales growth

TIMEX is here: very weak

So what do these numbers tell us?

1. When a company’s mkt share falls in the ‘other’ group (slide 5), it means it does not have a brand equity. Its brand image does not exist in the minds of customers.

2. TIMEX is competing in a segment that is losing importance..the 50 to 150 $ segment (dominated by Swatch) and the 150 to 500 $ is only 4%.

3. In the luxury segment where Rolex, Richemont and LVMH also dominate, the existence of the Ferragamo, Versus and Versace brands is not enough to view TIMEX as a ‘legitimate’ competitor.

4. In the sports segment where Citizen Casio Seiko, make up 9% of the mkt (combined)..where is TIMEX?

If TIMEX continues to compete in this RED Ocean it will continue to be a marginal player.

TIMEX NEEDS TO COMPETE IN A BLUE OCEAN WITH NO COMPETITION.

TIMEX needs a change in strategy This change cannot be in terms of ‘innovation only’.

The brand image must be reconstructed and the perception of customers gradually changed The market seems to be very receptive to new brands, new technogies,

new ways of using watches. Just think of the recent APPLE + FERRARI project to develop a system to

manage the car? Can TIMEX do something even more daring? YES, IT CAN!

If Apple, Samsung LG are entering this mkt there must a good reason! Watches are no longer just for telling the time..they are infinitely more

complex tools to do a number of things and we are barely scratching the surface with the new applications.

Capturing a BLUE Ocean is not easy. There are potential mistakes and forces that might want to keep the ‘status quo’. Will TIMEX be able of creating a new market where no competitors exist? The brands in the following slides are trying hard. It’s TIME for TIMEX to do the same.

http://malditech.corriere.it/2014/02/24/mobile-world-congress-2014-huawei-e-il-braccialetto-che-si-trasforma-in-auricolare/

http://bits.blogs.nytimes.com/2014/02/24/samsung-takes-a-more-focused-approach-with-new-smartphone-and-smart-watch/?ribbon-ad-idx=3&rref=technology&module=Ribbon&version=context&region=Header&action=click&contentCollection=Technology&pgtype=Blogs

http://www.forbes.com/sites/ewanspence/2013/11/10/sony-smartwatch-2-review-minimalism-and-iteration-create-a-useful-connected-timepiece/

http://www.forbes.com/sites/ewanspence/2013/12/08/pebble-review-the-underdog-that-proves-smartwatches-are-worthwhile/

http://online.wsj.com/news/articles/SB10001424052702304914204579399632542157554?mod=WSJEUROPE_hpp_MIDDLETopNews&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304914204579399632542157554.html%3Fmod%3DWSJEUROPE_hpp_MIDDLETopNews

An attendee tests a Galaxy Gear 2 wearable device during a Samsung Electronics Co. news conference.

Fitbit Flex wearable electronic fitness devices sit on display at the Fitbit at MWC.

http://www.androidiani.com/google-2/smartwatch-di-google-queste-le-specifiche-tecniche-200755