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007 with a smartwatch? Maybe and it might be an Omega

Source: Omega

James Bond — otherwise known as 007 and gracing the big screen in "Spectre" this weekend — is a man of class and sophistication who can still be seen drinking martinis.

In the movie, Daniel Craig, the latest actor playing the world famous British spy, can also be seen sporting a timepiece by Swiss watchmaker Omega, an official partner of the Bond movies for the past two decades.

Martinis are something "which nobody really drinks anymore," Stephen Urquhart, Omega's president told CNBC in a recent interview at the company's Fifth Avenue store in New York City. Ironically, given his line of work, Urquhart even thinks watches have become something of an anachronism.

"Bond in the film doesn't need a watch," he said, adding, "Who the hell needs the time today?"

Swiss watch makers like Omega — a big part of The Swatch Group's nearly 9 billion francs (about $9 billion) in gross sales last year — have been feeling the pinch from the explosive growth in mobile devices, which experts say have become the default time keeper for younger consumers. For some watchmakers, a concern is that mobile device-addicted consumers might become accustomed to going without wrist devices.

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Yet it's the latter part where Urquhart sees an opportunity in the newly released Apple Watch. He says the booming wearables market may eventually boost Omega watches, which can easily cost thousands of dollars.

He said smartwatch makers — with all the applications, bells and whistles — can actually get consumers wearing watches again. "From there…they will buy a watch that has a certain lasting value," he said.

Urquhart looked down at a wrist adorned with a $7,500 Omega Seamaster watch, the latest limited edition timepiece that he said is identical to the one featured in "Spectre." He quipped, "I think the watch that Mr. Bond is wearing in this film is as smart as you can get."

Source: Specter

Watch exports from Switzerland have been in a downward trend this year, according to the Federation of the Swiss Watch Industry, which found the value of exports for September was down almost 8 percent from the year before. Asia, the Federation noted, "bore the brunt of the decline."

Urquhart expects some of that to spill over into Omega's sales, especially as China retrenches economically.

"We might see fewer gold watches being bought because, you know, who the hell needs a gold watch," he said. Although he sees India's emerging middle class as a "big market," Urquhart said it's still an "underdeveloped market for watches."

The state of play means that luxury brands like Omega, which rely on sophisticated and style-conscious consumers, are eyeing digital trends carefully. Yet some industry researchers say the Swiss watch and smartwatch are two different businesses that could coexist peacefully.

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"The Apple Watch is a complement to the Swiss watch," said Ryan Raffaelli, an assistant professor at Harvard Business School who has conducted case studies on the Swiss watch industry.

He said his research suggests consumers view high-end Swiss watches as status symbols or works of art — meaning they'll opt to hold on to them. Conversely, Apple Watch wearers "are already awaiting the opportunity to ditch their first gen watch for an upgraded second edition."

Omega's Urquhart had kind words for the tech giant's foray into the hot wearables market. "Obviously, when the No. 1 brand in the world comes out with a smartwatch, they're not going to fool around. They're going to put a lot of effort into that," Urquhart said.

Separately, watchmaker Tag Heuer is delving into the smartwatch sector. The LVMH brand is expected to launch its own smartwatch this quarter, in partnership with Google and Intel. It's a move that Urquhart thinks is an attempt by Tag Heuer to "reposition the brand a little bit lower."

For mid-range brands like Tag Heuer that target consumers with relatively affordable prices and aim to differentiate their brand, jumping into the smartwatch fray is "not a bad gamble," said Harvard's Raffaelli. But for high-end brands, he said, there's "little to gain" in that market.

Would Bond wear a smartwatch?

Still, under the right circumstances, said Urquhart, Omega would consider dabbling in smartwatches, although perhaps not one that would compete directly with Apple.

"There's enough people [using wearables] and all that stuff" so Urquhart is not interested in competing on the health merits for watches. But creating a limited smartwatch linked directly to a special event like the Olympics — for which Omega is the official timekeeper? "Sure, there are some possibilities," the executive added.

The changing watch market raises the possibility that James Bond himself could one day strap on a smartwatch for a 007 sequel. Yet observers like Raffaeli think that "like his penchant for bespoke suits and classic drinks, a Swiss watch will always find its way back on his wrist."

All of which means fans shouldn't expect to Bond to use his timepiece to count how many calories he's burned, or log in to Facebook.

"I just don't think [a smartwatch is] who Bond is," Naomie Harris, who co-stars with Craig as "Miss Moneypenny" in "Spectre," told CNBC at Omega's store.

"You can only modernize him so much," she added.