Japanese watch manufacturers knocked the Swiss off their pedestal in the 1970s with the quartz watch, but in recent years, the Swiss have taken the lead again, thanks to increasing global interest in Swiss-made timepieces over the past two decades.

According to Mr Nick Hayek Jr, chief executive of the Swatch Group, the demand for high-end watches in the prestige market segment is growing, but the market for the middle and lower range watches is more fragmented, with sales growth unevenly spread out.

"It has been a record year - especially for the brands we offer in the prestige market," he adds. "Breguet, Blancpain, Glash�tte Original and Omega are moving positively. According to the Federation of the Watch Industry, the industry grew 2.6 per cent in July 2005, but our growth was three times better."

He also notes that there are more consumers upgrading their collection and going for mechanical and authentic brands. "Brands like Breguet and Omega are experiencing interesting rates of growth. In Aasia alone, Blancpain is growing at more than 25 per cent over what was achieved in 2004."

In terms of high-end mechanical brands, the Swatch Group's Breguet ranks among the top watchmaking companies such as Patek Philippe, Aaudemars Piguet, Vacheron Constantin and Girard- Perregaux. In fact, Breguet is the largest producer of tourbillons worldwide. "Between 70 percent and 80 per cent of tourbillon production in the world is made by Breguet which has always been known for its complications."

In the meantime, the demand for jewelled timepieces continues to climb.

"In the past, precious stones were only set on solid white or yellow gold watches. It was extremely popular in the 1970s and the 1980s. In the early 1990s, technical watches became popular, but at that time too, steel watches could be set with diamonds,"says Raymond Lim, executive director, Cortina Watch.

This meant that jewelled pieces became more affordable, and the demand has grown over the years. "The quantity of steel diamond watches demanded remains," says Mr Lim, and he cites the stable demand for the Omega Constellation as an example.

In fact, more watch brands are targeting at women by introducing jewellery watches. Highly established brands like Cartier, Piaget, Chopard and Blancpain have always been known for their jewellery watch collections.

Now, even brands like Girard-Perregaux have joined the fray with its aggressive launch of their Cat's Eye diamond-set collection. Corum, Locman and Rado are coming up strongly too.

According to jeweller and watch appraiser Eeric Ong of Bonfield Traders, high-end jewellery timepieces are works of art. "The value of these works of art is created when the master watchmaker and the designer sit down together to plan the production of an object that is truly one-of-a-kind. These are very limited in production, as the gem-setter must be highly trained. The pieces are also unique because the diamonds are set by hand."

So are jewelled timepieces more desirable than pure mechanical ones?

"Limited editions of technical watches will always have ready buyers because of antique collectors and syndicates," says Cortina's Mr Lim.

"The market for jewellery pieces is not like that. Only 40 per cent of those who love jewelled timepieces will look at the movement of the watch; the remaining 60 per cent will consider the design and quality of stones on the timepiece."

LOOKING AHEAD

Four key people in the industry talk about trends for the coming year

Tay Liam Wee
Group Managing Director of specialist watch retailer Sincere Watch
"Watch designs will become simpler in the future, and attention will be focused on technical watches for women. Luxury sports watches set with precious stones will be hot items. Brands like de Grisogono are already defining the trend."

Nash Benjamin
Deputy CEO, FJ Benjamin Group
"More ladies are buying watches. The women of today are bold and confident, and have gained an increased appreciation for mechanical timepieces. I expect more women to switch over to mechanical watches. The stage has been set, and even ladies pieces with a high-end complication like the tourbillon will be in demand."

Raymond Lim
Executive Director, Cortina Watch
"There will be an increased demand for high-end jewellery pieces. Eestablished brands like Ppiaget and Girard-Perregaux are coming out with excellent jewelled timepiece collections."

Michael Tay
Executive Director, The Hour Glass
"There will be a wider swing towards highly technical pieces; independent watchmakers like Pphilippe Dufour and Vianney Halter will be much sought after, as they represent watchmaking from the past in the present. Philippe Dufour's watches define watchmaking purity in its finest form."