Is Apple’s iWatch Going to Be Swiss Made?

24/7 Wall St.

Although Apple Inc. (AAPL) has kept mum on the subject, Paris-listed luxury goods maker LVMH said on Friday that Patrick Pruniaux, vice-president of sales for its TAG Heuer watch division, has left the company to take a job at Apple. The tech company is expected to launch its first wearable device, dubbed by everyone as the iWatch, later this fall.

Apple has made at least two other significant hires from the luxury goods sector. The company's new head of retail and online sales, Angela Ahrendts, left a position as CEO of Burberry to take the Apple job, and the former head of fashion brand Yves Saint Laurent joined Apple last year to work on special projects.

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Selling technology products at a premium price is a tricky business, and Apple has recognized that and is bringing in the talent to help the company maintain the brand's position and, most important, its profit margins. The hiring of Pruniaux is believed to be part of Apple's strategy of identifying its iWatch as "Swiss made," a designation that carries a lot of prestige in the watchmaking world.

Maybe it will work and maybe it won't. A senior analyst in the luxury goods sector told CNBC that "the Swiss have no great interest in working with Apple." A luxury goods maker putting a "Swiss made" label on a device designed in California and assembled in China is diluting the value of the Swiss brand.

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If Apple does try to brand its iWatch as Swiss made, look for some serious blowback from the makers of real Swiss watches. Recall that U.S. makers of sparkling wines are prohibited from calling their product "Champagne," although some wines produced in the California can be labeled as "California Champagne." "Swiss made in China" perhaps lacks that je ne sais quoi attached to luxury goods.

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