The Audemars Piguet x Swatch Gamble - Borrowing Against Brand Equity.

Two Houses, One Hundred Years Apart

The Unlikely Ancestry of an Unlikely Deal

A house that answered the quartz crisis with a steel watch priced like gold — and a house that answered it with plastic, and a joke about childhood.

Audemars Piguet was founded in 1881 in Switzerland by two childhood friends, Jules Louis Audemars and Edward Auguste Piguet. Both men already had experience in watchmaking, with Audemars previously creating watch movements for the Tiffany company, while Piguet was an expert in regulating watch movements. The partnership and distribution of the workload, where Audemars was overseeing production and the technical aspects, while Piguet focused on sales and management, allowed them to expand, and by 1882, the company had opened stores in London and Paris. 

They developed the first minute repeater wristwatch in 1892, which at the time was a statement of wealth, as only the affluent were able to afford such an exquisite timepiece. Followed by pieces such as the Grand Complication pocket watch, developed in 1899; the thinnest pocket watch in 1925; the thinnest wristwatch in 1946; and more. 

The company grew slowly, from around 100 watches per year in the 1880s to selling more than 1000 watches in a year by 1926. Despite facing financial struggles following the 1929 stock market crash and suffering 15 straight years of financial losses through 1945, AP had a strong recovery, and by 1952 its sales topped one million Swiss francs and exceeded 1000 watches.

The company is no stranger to taking radical courses of action. The invention of their most notable piece, which today is the face of the brand - the Royal Oak- originated from such a bold decision. During the 1970s, amidst the market being flooded with cheaper quartz watches from Asia, AP decided they would take a completely different approach and create the first luxury sports wristwatch. This decision paved the path for the company to become one of the most prestigious and respected watchmaking brands today, along with brands like Rolex and Patek Philippe.

Alternatively, Swatch emerged by taking a different approach to differentiate itself from the cheaper asian quartz watches. During these times, when most Swiss watchmakers struggled, Nicolas Hayek, who was engaged through his consultancy, helped with the liquidation of two of the biggest groups of watchmakers - SSIH and ASUAG. But he saw potential to bring back the watchmaking industry in Switzerland. He merged the two entities and became the CEO of the new group. His goal was to optimise and automate the process to reduce the costs as much as possible. Even though this was met with a lot of resistance from Swiss watchmakers, Hayek succeeded. He managed to introduce a Swatch movement with 51 parts, compared to the 91 units for a conventional quartz watch. 

Nevertheless, that wasn’t the differentiating factor that made the brand successful. It was their message, as Nicholas Hayek stated in an interview; the secret behind their success was the feeling conveyed by the brand: “embracing the fantasy and imagination of your childhood and youth”. The brand is built on its interesting and out-of-the-box designs. Further, this allowed them to reach a new audience -  young people who hadn't shown any interest in watches before. 

Ultimately, the combination of the different brands in the Swatch Group catering to different audiences and budgets has allowed the brand to rise to its current state as the largest manufacturer of watches.

The question this raises

How, and why, did a partnership between two houses this far apart ever come to be?

$40,000 Average · $400 Retail

The story of the deal

Eight pocket watches, two case styles, ninety hours of reserve — and two orders of magnitude shaved off the only number the market had ever used to read the brand.

Despite coming as a shock for many people, similar collaborations have already been established in the past and have proven to be more than just short-term plays. An example of this is the OMEGA and Swatch collaboration back in 2022, as discovered in an interview with the Swatch Group CEO Nick Hayek with Bloomberg UK, saying that the Speedmaster Moonwatch model, which retails for about $7,000, has increased its sales by more than 50%. Additionally, all other Speedmaster models have seen a rise in sales due to the collaboration. 

However, Swatch's attempt to replicate this formula was not always successful. In 2023, the Blancpain x Swatch Bioceramic Scuba Fifty Fathoms launched to an understated reaction, with online sentiment bias being 17.8% negative, mostly attributed to Blancpain's limited mainstream recognition outside serious collector circles. 

Swatch appears to have drawn a clear lesson: a partnership needs each brand to bring something credible to the table — and for a general audience, Blancpain simply did not resonate the way Omega had. Thus, the choice of Audemars Piguet as a partner was no accident — it was a deliberate escalation, pairing Swatch with a name whose cultural reach extends well beyond the confines of horology 

Yet the announcement, as expected, was polarising. Opinions divided quickly, creating tension within the watch community about where the boundaries of luxury should lie.

The co-branded product was the RoyalPop collection. There are no wristwatches; it consists of eight unique and colourful Royal Oak-inspired pocket watches. They came in two main variants - the “Lépine" style, where the crown is at 12 o’clock and the "Savonette" cases with the crown positioned at 3 o’clock. Moreover, mechanically, they weren’t simple pieces, with the new SISTEM51 manually-wound movement providing an over 90-hour power reserve. 

Probably, the most discussed aspect was the price, with the Lépine-style retailing for $400, and the Savonnette-style retailing for $420. For a brand like AP, which has an average price of around $40,000 and going up to $300,000 and more for special pieces, it created a lot of controversy to be selling a non-limited product at such a price, posing a risk of diluting and cheapening the brand’s name.

The Community Split · The Trade Didn’t

What the experts think

The forum war was fought at the dilution end. Almost nobody who has actually run one of these brands is standing there.

The opinions of authoritative figures in the space also differed, but most believed it would be beneficial for both parties. As the CEO of the World Watch Company shared in an interview:

“Based on what we saw with MoonSwatch, these collaborations tend to boost interest in the original rather than hurt it. Speedmaster sales went up meaningfully after that launch, and I’d expect something similar here: a Swatch is not a replacement for a Royal Oak. If anything, it just creates more future Royal Oak buyers.” 

Additionally, as the Editorial Director for WatchTimes put it:

“The new collaboration between Audemars Piguet and Swatch is simply fun. The whole bag-charm and collectable frenzy has found its way back into the watch world — and honestly, that's exactly what I love about it. It reminds me of the collectable crazes of my teenage years: those little objects that everyone suddenly wanted because they had personality and sparked conversation. I think it's wonderful that watches can still be part of that culture — especially at a more accessible price point. I'm curious to see how it unfolds.”

These thoughts are in alignment with what François-Henry Bennahmias, the former CEO of Audemars Piguet, believed and mentioned in an interview regarding the MoonSwatch collaboration:

“Their collaboration is a great idea, which does not affect the integrity of Omega at all, contrary to what you may have heard. Why is that? Because it educates the younger generation about the icons of watchmaking. “

Swatch Risks a Season · AP Risks a Century

The gains

and the risks

for AP

40% more Royal Oak demand 50,000 watches a year, by design

One dial, two hands, and a register split fifty–fifty — the profit share is even, and the exposure is not.

While this type of collaboration has proven successful in the past, Audemars Piguet stands to bear the greater share of the risk, given how much it has to lose with its century-old reputation.

For Swatch, the ramifications are tremendously favourable. To fully appreciate why this collaboration matters to Swatch, one must look at the financial condition of the group. In 2025, Swatch Group reported sales of CHF 6.28 billion, a decline of 5.9%, with operating profit collapsing from CHF 304 million to CHF 135 million and net profit shrinking to just CHF 25 million — a net margin of 0.4%. Critically, this was not an isolated bad year. It marked the third consecutive year of decline for the group. The Royal Pop collaboration came as a financial lifeline. The association with Audemars Piguet, one of the most prestigious names in watchmaking, offered Swatch credibility, urgency, and foot traffic. The 15% jump in Swatch Group's share price following the announcement suggests investors understood the importance of the collaboration. For a group producing a net margin of less than half a percent, a collaboration that drives store visits, generates global press coverage, and reasserts brand relevance is worth considerably more than the watches themselves.

However, for AP, the situation is far more nuanced. As a privately held company licensing the Royal Oak silhouette for the first time in 54 years to a mass-market partner, any long-term brand damage will not show up in a quarterly earnings call. It is the slow erosion of the exclusivity that justifies $50,000 entry prices and multi-year waiting lists. That kind of brand damage does not show up immediately. 

Following this is the concern of the cheapening of the brand by selling the co-branded watch, which looks like the Royal Oak, at just a fraction of the price. However, of course, a company of the calibre of Audemars Piguet has come up with a smart hedge to prevent this scenario. The pocket watch form and the bright colours distinguish it from the original, while also engaging with new audiences.

SISTEM51 · Manually Wound · Ninety Hours

The $400 movement, opened up

Ninety hours of reserve, compressed into ninety seconds. Hold the crown to wind it — and then leave it alone, and watch what a manually wound watch does to an owner who loses interest.

01Crown & stem02Barrel & mainspring03Going train04Escapement05Balance & hairspring06Case & bezel

The crown, and the stem

Hold it to wind it. The calibre in the RoyalPop is manually wound — no rotor, no battery, no convenience. It is a $400 watch that stops if its owner stops caring, which is quietly the most Audemars Piguet thing about it. Let go for ninety seconds and you will see what that means.

Schematic: an original drawing of a going train and escapement, not a technical reproduction of the calibre. The beat runs faster than life; the reserve drains an hour a second, and only while you're watching. 90/ 90 h reserve Hold to wind

Though both risks threaten the brand's legacy, when we zoom out and look at the bigger picture, there are also many potential benefits. As previously mentioned, this eye-catching collaboration generated many headlines across social media and, in turn, exposed the exclusive brand to a new market among the younger generation; combined with the collection's affordability and availability, it could lead to the creation of the next generation of Royal Oak owners. Moreover, the manual-wind movement introduces this new segment of enthusiasts to the world of watch mechanisms that will enable them to experience the watch in a new way. 

If it converts even a small number of Royal Pop buyers into true Audemars Piguet connoisseurs, the long-term commercial upside is considerable. RBC Capital Markets projected sales of 3 million units between 2026 and 2029, generating approximately CHF 1.05 billion in revenue and CHF 390 million in EBIT profit for Swatch — split 50/50 with Audemars Piguet under the terms of the collaboration. The decision of AP to donate 100% of its share of profits to a dedicated initiative preserving rare watchmaking skills speaks a lot about its intentions. While critics remain fixated on short-term brand dilution, Audemars Piguet appears to be playing an entirely different game — one measured not in quarterly results, but in decades.

Ninety Hours of Reserve · Decades of Judgement

What kind of future awaits AP?

Every mainspring answers the same question eventually: how much of the wind was hype, and how much of it still turns the hands years from now.

The answer to this question isn’t straightforward. While the collaboration can be described as unconventional given industry norms of acting in accordance with established reputations, it is not unprecedented. Under the management of François-Henry Bennahmias, who pushed AP into collaborations with pop culture and art, Audemars Piguet has done other collaborations which deviated from the elegant and clean aesthetic that is associated with the brand. These include the Marvel and the APxKAWS with Brian Donnelly - a globally renowned contemporary artist and designer- both of which have been deemed overwhelmingly successful, with the pieces in both of these collections having a retail price of more than $200,000 and being sold out. This demonstrates that there is high demand for such creative expressions. 

The cultural visibility among audiences it could not reach through boutiques, a beginning relationship with younger consumers and women through the pocket watch format and bag-charm positioning, and a first-mover advantage in redefining what luxury accessibility can look like without directly cannibalising the Royal Oak. Data from Chrono24 supports this early thesis — a 40% increase in Royal Oak demand and the majority of Royal Pop buyers being new to the platform suggest the collaboration is attracting, rather than displacing, serious collector interest. 

 Moreover, the halo effect created by the collaboration's launch has increased demand for the MoonSwatch by more than 400%. However, the halo effect has an important limitation: it is difficult to falsify in the short term. Rising Royal Oak demand could reflect genuine brand discovery driven by the Royal Pop, or it could simply reflect the broader recovery of the luxury watch market after its 40% decline from the 2022 peak. Without the full picture, the causal link between the collaboration and improved brand metrics remains an assumption, not a conclusion. 

 For Swatch, a publicly listed company with a share price under structural pressure, the Royal Pop was a relatively low-cost transaction — a short-term boost to foot traffic, brand prestige, and investor sentiment. The 15% share price jump post-announcement tells that story clearly. Being associated with one of the most respected names in the "Holy Trinity" of Swiss watchmaking. For Audemars Piguet, the risk is existential. 

Ultimately, there is no definite answer to what the future holds for the brand and how things will play out in a couple of years. The Royal Pop may prove to be a brilliant move, but my honest assessment is this: for Swatch, it was cheap and brought many benefits. On the other side, for Audemars Piguet, it could prove to be one of the most consequential decisions in the brand's 150-year history — and the verdict will not be known for years.

NM

Written by

Nikolay Marinski

Chief Business Analyst

The Financier Review.

© 2026 The Financier Review. All rights reserved.

For the Record

Sources & References

1. Chrono24. (2026, May 21). Swatch Royal Pop: What Chrono24 data says about the hype. Chrono24.com.
   chrono24.com
2. Corder, R. (2024, June 19). Rolex, Audemars Piguet and Patek Philippe prices are down over 40% since pre-owned peak in 2022. WatchPro USA.
   usa.watchpro.com
3. Lüthy, T. (2026, May 31). Was the Royal Pop a success? Reading the numbers, two weeks on. Helvetus.
   helvetus.com
4. Swatch Group. (2026, January 30). Key figures 2025 — Swatch Group. Swatchgroup.com.
   swatchgroup.com
5. Karaahmetovic, V. (2026, May 13). RBC upgrades Swatch on AP collab but shares slide on mixed reception. Investing.com.
   investing.com

The Financier Review — accessed July 2026.