Two years ago, Swatch Group made a quite sensation in the watch industry by announcing that its movement making division ETA would stop supplying watch movements to watch brands that are not under the wings of Swatch Group in 2010. As known to all, ETA is the biggest and most influential movement maker in the Switzerland. Most Swiss watch brands depends on the movement supply from ETA. ETA produces a wide selection of movements from high-end mechanical movements to quartz movements.
All watches brands under Swatch Group uses movements from ETA, while ETA also supplies movements to outside watch companies at present. But according Nicolas Hayek, Chairman of Swatch Group, this situation will be changed. He confirms that ETA will not supply movements to outside brands from 2010.
has been under investigation by on whether this move is. Probes have been launched in the past as well to identify whether or not ETA was engaging in unfair pricing and related charges. The current probe is likely interested in whether such practices of shutting out hat are important to the Swiss economy is a legal move by the Swatch Group.
Swiss government authorities have investigated ETA to decide if the decision is illegal and anti-monopolistic. Also lost of probes have been made to judge whether ETA was involving in unfair pricing and related charges. And the recent probe is see if the shutting-out move to other Swiss watch brands that greatly contribute to the country’s economy is legal of not .
The move would be deadly for lots of brands that rely on the movement supply from ETA. But it may create a great opportunity for other movement makers that are able to those sophisticated movement parts. ETA’s biggest competitors Sellita and Ronda may quickly take actions to fill the blank of market.
Lots of high volume movements by ETA do not have intellectual property rights any longer. And we know, these patent rights only enjoy certain period of protection before their covered technologies can be used by anyone. For example, the ETA 2824-2 has been copied by other brands like Sellita for quite a time. And brands can go for Japanese movement makers to face the possible movement shortage.
ETA is very likely to stop supplying watch movements to outside Swiss brands in sometime of 2010. I will wait to see how the industry reacts this big move.
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