Swatch says it’ll release its smartwatch in the next three months, according to Bloomberg. This strongly suggests that Swatch wants to get a product in the market around the same time the Apple Watch appears in April.
The timing of the release of the new Swatch smartwatch will make it seem like an also-ran. Swatch will be launching its device in the middle of a storm of media and public interest in the Apple Watch.
No doubt Swatch has some iconic power, mostly left over from the grand old ’80s, but it’s already made some crucial strategic errors.
Swatch apparently is not working in the iOS ecosystem, favoring Android and Windows (Windows!).
As far as features go, the details that we’ve seen so far seem to be a direct response to the guts of the Apple Watch.
For instance, reports say that the Swatch Watch will contain a Near Field Communication chip, like the Watch. The Swatch watch will do mobile payments with its NFC chip, but it’s likely that it will rely on a paired smartphone to complete mobile payments — just as the Apple Watch will rely on the iPhone to do Apple Pay transactions. NFC chip maker sources tell VentureBeat it may take a year or more to divorce smartwatches from smartphones to do mobile payments.
And Apple’s Watch will rely on its own tightly integrated mobile payments platform Apple Pay, which is already getting a lot of market experience on iPhones. Swatch has no such experience with smartwatches or otherwise.
Still the market for smartwatches could be large. Citigroup analysts have said the smartwatch market will reach about $10 billion in 2018, and half of those sales will come from people switching over from traditional watches.
The Apple Watch will sell for $349 and up. Apple has always played in the higher price ranges with its products, and the Watch is no exception. Swatch may be able to find an opening if it sells its smartwatch in the $200 range.
And Swatch does have lots of experience building super-thin batteries for watches. Swatch CEO Nick Hayek says companies in his group are developing new batteries that could double the battery life of smartwatches in the next two years. It also has a division that makes the tiny touchscreens for watches.
But Swatch is an old-school Swiss watchmaker struggling to make peace with a very new paradigm. In fact it was wasn’t too long ago that its CEO, Nick Hayek, had a change of heart on smartwatches. Before that he downplayed the new category, saying repeatedly that people really want luxury watches (perhaps with some “smart” features built in). He also expressed concerns about the ability of users to interact with screens that small.
These are all completely legitimate ideas. The fact is, nobody knows yet how the market will accept future generations of smartwatches.
The point is that when a company’s CEO finally throws his weight behind a product category just months before the market leader (Apple) is set to announce its flagship product, the internal culture in a huge group like Swatch can’t be firing on all cylinders when it comes to designing and building a killer smartwatch.
And the result of this hesitation will show up in Swatch’s product when it finally appears.
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