Recession Bucker

The solid-state electronic technology that drastically reduced the price and bulk of calculators is now shaking up the watch industry--and producing a trend that defies both inflation and recession. "Quartz" timepieces powered by one-year silver oxide batteries came on the market in 1970, but as late as 1973 yearly sales of the devices were only 176,000. Then last year, despite a 12% rate of national inflation, manufacturing economics enabled sellers to mark down price tags from an average $118 to about $95, and volume jumped to 650,000 even as the recession deepened. Tom M. Hyltin, president of Micro Display Systems, a subsidiary of the Japanese watchmaker Seiko, estimates that this year sales will leap to 2.2 million, as the price drops to the $50 range. By 1977 the infant industry confidently expects to sell a cool 10 million quartz watches at just $20 each.

New Faces. Traditional watchmakers are not letting themselves be caught dozing; almost all are regearing for a solid-state bonanza. But inevitably, the technological change is bringing a host of new corporate faces into the watch industry, mostly as manufacturers of components. Among them: Motorola, RCA, Intel and National Semiconductor. The last two not only supply traditional watchmakers, but also have begun turning out finished products of their own. The newcomers are almost all from the computer and radio industries, where much of the solid-state technology originated.

The devices are called quartz watches because instead of the standard balance wheel, they rely on an oscillating current in a small battery-charged quartz crystal. The current in turn powers a tiny integrated circuit, which emits pulses that regulate either standard minute and hour hands or a digital display. The watches are accurate to within a minute a year v. one to two minutes a week for standard models.

For a time, some digital displays were dying out after a few weeks, which understandably inhibited sales, but manufacturers say that such kinks have been ironed out. Consumers now can buy either a display that must be switched on for viewing or a "liquid-crystal" display that remains constantly illuminated. For those willing to shell out at least $500, Ragen Precision Industries of New Jersey offers a no-battery "solar" powered model, which requires so little light for power that the manufacturer claims it will still be running after a year in a drawer.

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