Swatch gets smarter in face of looming Apple Watch threat
Swatch's products to enable mobile payments after co-founder warns of 'Ice Age' for watchmakers
Swatch, the world's bestselling watch manufacturer, has announced plans to include "smart" functions in its products amid looming pressure from the Apple Watch.
Experts have warned that Apple's high-tech smartwatch, which will go on sale in nine countries from April, could result in big losses for traditional Swiss watchmakers.Instead of launching a dedicated smartwatch, Swatch has announced plans to feature wireless technology, known as near-field communications (NFC), in its products, enabling users to make mobile payments from their watches. The first of the tech-enhanced timepieces will go on sale in May, says the BBC.Swatch Group has already signed a payments deal with China UnionPay, a bank-card association in China, as well as deals with a Swiss bank and a big credit-card company, which are yet to be identified.The Washington Post says Swatch is particularly vulnerable to losses because it generates about a third of its revenue from low and mid-market brands.Luca Solca, an analyst at Exane BNP Paribas, estimates that smartwatches could take as much as 10 per cent of the company's entry-level plastic brand and five per cent of its mid-market brands in 2015, knocking around £500m or five per cent from annual net sales.Nick Hayek, chief executive of Swatch Group, has previously been dismissive about smartwatches, criticising their small screens, weak batteries and inelegant designs."We are not a consumer technology company," he said yesterday. "We don't want to produce a reduced, minimised mobile phone on your wrist."However, he admitted that the Apple Watch was the nicest smartwatch he had seen and insisted there was room for both Swatch and Apple products on the market.He also announced a new line of watches, called Swatch Touch, which will incorporate functions such as a step counter.
Earlier in the week, Swatch co-founder Elmar Mock said the Apple Watch will "put a lot of pressure on the traditional watch industry and jobs in Switzerland", suggesting that the industry as a whole had been underestimating the threat. "I do expect an Ice Age coming toward us," he warned.