Swatch might get "smart" after all
In late July, word had it of an alleged partnership between Apple Inc. and legendary timepiece manufacturer Swatch. The rumors turned out to be nothing but speculative allegations, yet, most recently, more rumors are surfacing on the possibility that the Swiss watch manufacturer might implement smart features in some selected lines, making use of fitness tracking technology, among others.
What caused Swatch CEO Nick Hayek’s change of heart, in respect to a formerly dismissive attitude in regard to smartwatches, can be traced to a combination of declining stock value, as well as the most recent developments on the much anticipated Apple iWatch, along with the rise of fitness bands, and more wearables soon to flood the market in the following years.
In the past years, Swatch has consistently ignored smartwatches, and never once considered the potential for growth of a device that manufacturers have already started to take very seriously.
From the consumer-targeted Galaxy and Pebble, to the high-priced and feature-packed Kairos, already dubbed “the best smartwatch in the world”, and also the most expensive, consumers are beginning to notice a certain range of choices, beginning to form before their eyes.
Swatch is now finding itself in a very vulnerable position, according to Bernstein analyst Mario Ortelli. 30% of the company’s revenue comes from low to mid-range brands, and considering that even some of Swatch’s plastic lines range between $150 and $300, the introduction of smart features might force the company to increase price tags to a point where buyers might question whether a “Smart Swatch” is truly worth it, especially since the Apple iWatch will be most likely cheaper, and able to make phone calls, among other things.
Alas, something must be done, as the past 12 months have reported a stock drop by almost 11%.
The Swiss manufacturer is not alone, as luxury timepiece manufacturer Louis Vuitton, and Richmond have seen a sizable decrease as well, between 5% and 6%.
Hayek has revealed very little on the features to be added to his Touch line, suggesting that future lines will include “usual features”, such as heart rate monitor, speed monitors and training calculators, without further comment.