TI's first light emitting diode (LED) digital watch featured a black plastic case and a red LED digital display. Eventually, watches of this type were reduced to sell sold at a suggested retail price of $9.95.

First electronic watches introduced; used light-emitting diodes (LEDs)

With its successful entry into the calculator market in 1972, TI was ready to turn up the heat on its consumer strategy. At the stockholders meeting in 1976, having announced a $10 billion revenue goal just two years earlier, TI was ready to make it official – consumer electronic products would be one of its three major growth thrusts. Semiconductors and distributed computing were the other two. The company launched a succession of new consumer products, including digital watches. Innovations helped create new markets, changed the way consumers perceived the usefulness of electronics, and made TI a household name around the world.

TI’s introduction of electronic digital watches was a business landmark at the 1975 Consumer Electronic Show in Chicago. TI brought out three high-fashion liquid crystal display (LCD) watches; three personalized watches with light-emitting diode (LED) displays for men and women; and a compact, seven-function LCD digital travel alarm. TI had earlier developed custom integrated circuits and LEDs for the watch market and had an established distribution channel for calculators. It was a small step to make low-cost cases for the watches and purchase the bands and batteries for a complete watch. The opportunity for value added was compelling.

TI chose to enter the watch market at under the $40 price point and targeted mass distribution, such as department stores, discount stores and large catalogers. At the time, there were few digital watches available to consumers for under $100. The chip design began in December 1974 for TI’s first watches, which were shipped in September 1975. The LED display was illuminated by pressing a button on the side of the watch.

By 1976, TI announced it was the leading supplier in the emerging digital watch market, which was projected to grow to 18 million units that year, up from 3.5 million in 1975. The largest part of the market was under the $20 segment, and in March 1976, TI delivered the first solid-state watches to retail for under $20. TI’s product development in watches proceeded in two directions – the low-end (under $10) and the high-tech end of the market, exemplified by the “Starburst” watch. TI’s analog electronic watch, the Starburst, introduced in July 1978, was the first totally electronic quartz LCD analog watch; it was manufactured until 1981.

Not to be outdone, several SC manufacturers offered digital watches. Eventually, all these would disappear from the market, as conventional watch manufacturers reclaimed the market, which ultimately proved to be more of a fashion market than an engineering timepiece market.

TI’s introduction of its $9.95 digital watch, which featured a red LED display and a plastic watchband, was the beginning of the end for TI’s foray in the watch market. Although the inexpensive watches were popular, TI was roundly criticized for the low price, which generated higher revenues, but not profits. In 1981, TI exited the business and focused on other opportunities.

 
Starburst watches
TI's consumer strategy
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