In smartphone age, watchmakers focus on luxury

BASEL, Switzerland -- In an age when many people carry smartphones that can tell the time -- on top of hundreds of other applications -- watchmakers are increasingly focused on selling their goods as luxury items.

The world's biggest trade fair for watches, the weeklong Baselworld, opened to the public Thursday, offering a spectacle of bling and highly crafted gadgetry.

Jacques J. Duchene, chairman of a committee representing 1,460 watchmakers, jewelry traders and exhibitors from 40 nations, acknowledged the luxury watch industry is out of step with the financial challenges felt by many people and industries around the world.

"Even in the face of all the economic imponderables, we remain optimistic for the current year," Duchene told a news conference. He had reason for optimism: The Swiss watch industry had another record year, with exports totaling 21.4 billion francs ($22.6 billion) in 2012, up almost 11 percent from the year before.

Business is generally good, but it's still a tough environment in Europe and the United States, said Ulrich Herzog, executive chairman of 109-year-old Swiss watchmaking firm Oris, which targets what it sees as the growing ranks of affluent middle-class buyers who are willing to spend in the $1,000-$5,000 range.

In emerging markets such as China, India and Brazil "a product in that gap can still attract a lot of people," Herzog said in an interview. "We have people who really look for something which is in their reach and represents a value."

Looking ahead to the rest of the year, Herzog said: "It's definitely going to be tougher than last year. You just feel it, that the markets, they're not so freely spending at the moment, because there's some serious [economic] problems around."

Still, said Baselworld managing director Sylvie Ritter, "Watches and jewelry are products that have grown closer together in recent years and are now on display side-by-side at this event."