The United States

The quartz revolution revitalized the U.S. watch industry.

Before the quartz revolution, the American watch industry was in a slump. Although the U.S. had been a strong competitor in the international watch market since the 1870s, many American companies had gone out of business or had been bought out by foreign interests by the 1960s. This situation improved with the invention of the quartz watch in 1969. The U.S. took the technological lead in developing the new quartz watches thanks to microelectronics research for military and space programs.

Price wars forced many competitors out of business.

Even though Swiss and Japanese inventors were developing quartz capabilities of their own, it was the new U.S. semiconductor companies--Texas Instruments, Fairchild, and National Semiconductor, for examples--that started mass production of digital quartz watches. Competition among these companies quickly forced prices down. The traditional U.S. watch companies that had survived the lean years after World War II were unable to compete and further declined in number.

The U.S. lost its lead to countries with cheaper labor supplies.

The U.S. lead was short-lived. Countries with cheap labor supplies, like Hong Kong, began mass-production of cheap quartz watches and flooded the market. The American semiconductor companies that had survived their own price wars at home now dropped out of the watch business completely.