Apple hires TAG Heuer sales director. Tick tock tick iWatch?

Apple has hired the sales director of TAG Heuer as it looks to label the iWatch as "Swiss made." Apple has been trying to lure top executives from high-end Swiss watch makers for months, but to little success.(Photo : Taco Ekkel)

Apple has hired the sales director of the TAG Heuer luxury watch company to assist with the company's upcoming launch of the iWatch.

Apple employed an executive from the LVMH brand of watches, which includes TAG Heuer, Zenith and Hublot, as the company will be looking to label the iWatch as "Swiss made," LVMH head Jean-Claude Biver told CNBC.

Biver added that he was happy for the former sales director, believing that his new role in Apple will be a great opportunity for him.

"If it had been a direct competitor, I would have felt a bit betrayed, but if he goes to Apple I think it is a great experience for him," said Biver.

Apple has been trying to lure top executives away from working at high-end Swiss watch makers, but with not much success. The company is looking for Swiss watch experts because the "Swiss made" label is synonymous with top-quality watches, according to Bernstein senior luxury items analyst Mario Ortelli.

"For sure they are trying to approach the Swiss manufacturers, but the Swiss have got no great interest in working with Apple - if you are a luxury producer and you cooperate with Apple, you have got a dilution," Ortelli said to CNBC.

Ortelli added that the Swiss watchmakers are moving away from creating devices such as Apple's because their products, which are designed in the U.S. state of California and manufactured in the Asian country of China, will negatively affect the "Swiss made" tag.

Ortelli also said that while Apple's iWatch, and other upcoming smartwatches, will be a threat to the low-end models of Swiss watches, the release of these devices into the market will actually be an advantage for high-end watch makers as young watch consumers are created who would eventually look for other watch brands after Apple.

It was first reported in March that Apple was trying to reach out to Swiss watch companies to forge partnerships, with Apple also contacting individuals to take their expertise into the company to work on the iWatch. Biver confirmed the reports, saying that Apple tried to hire away LVMH employees but failed in doing so.

The dominant belief among watch makers is that smartwatches have little potential, which is why most are skeptical on forging partnerships with Apple. Nick Hayek, chief executive of Swatch, pointed to technical constraints as one of the factors that could spell failure for the upcoming devices.

"To make a smartwatch work you need two hands or voice recognition, which again needs a lot of power, which is difficult in a very limited space," said Hayek. 

The iWatch is rumored to have a launch date some time later this year in the fourth quarter. 

Apple poaches another luxury executive as iWatch nears

Apple has poached a senior executive from Swiss luxury watch brand Tag Heuer, which could be to help it with the launch of its iWatch expected this autumn.

Tag Heuer, part of luxury goods group LVMH, said on Friday its vice president for sales, Patrick Pruniaux, who had been with the brand for seven years, was leaving on Monday to join Apple. It did not say what his new job would be.

Apple declined to comment.

The iWatch will be the closest the U.S. company has come to selling a fashion accessory and marks its first foray into the personal luxury goods market.

It is in a race against Samsung Electronics and Google to turn computers into wearable fashion and must-have items as smartphones, increasingly becoming commoditized items, start loosing their appeal.

Apple has plucked several executives from the luxury sector in recent months. Burberry ex-Chief Executive Angela Ahrendts started as its new head of retail and online sales in May, and former head of French fashion brand Yves Saint Laurent Paul Deneve was hired last year to work on special projects.

"I think he was probably head-hunted," a Tag Heuer spokeswoman said of Pruniaux, adding a replacement had already been found.

Analysts and industry executives say the jury is still out on whether smart watches will disrupt the luxury Swiss watch industry.

"I don't believe that an iWatch will be a threat to luxury Swiss watches," said Jon Cox, analyst at Kepler Cheuvreux in Zurich.

"But where I do see some potential impact is at lower, for example below $1,000, price points where there could be a temporary dislocation if there is super high demand for iWatches."

Jean-Claude Biver, head of watch brands at LVMH and chairman of watch brand Hublot, said he believed the threat of smart watches had to be taken seriously by the Swiss watch industry.

"The iWatch will have the same status symbol power as many other Apple products, especially at the beginning," he said. "I personally believe it has the potential to be a threat for the industry, and it should not stay with its arms crossed."

Apple applied for a trademark for the "iWatch" in Japan, a patent official said earlier this week, signalling the iPhone maker could be moving ahead with plans to launch a watch-like device soon.

Speculation has been mounting that Apple was preparing to launch an iWatch which would include multiple health and fitness sensors and access to features such as messages