The world’s largest watch maker under their several brands, plans to go head-to-head with Apple with new smartwatch.
The Biel-based watchmaker known for its trademark watches as well as Longines, Omega, and Tissot among others is looking to challenge the iconic Apple with a smartwatch of its own in the coming months. On Thursday, the company announced that its profits fell by 27% in 2014. The reasons for the drop in profits are essentially two-fold: Swatch spent a great deal marketing its products (especially at the Sochi Olympics) and they were certainly affected by the rise in the Swiss franc.
When the Swiss central bank rubbished its long-standing cap on the franc on Jan. 15th, Swatch lost about $148 million in sales from 2014 according to the company. In order to return to last year’s profit Swatch needs to increase sales and Hayek suggests its not that much of a needed increase.
“We then looked at how much sales we would have to get the same profit as before, and worked out it would only be 200 million francs to 250 million francs more,” said Mr. Hayek. “That would wipe out the losses from the national bank’s move.”
Swatch reverses smartphone course
But Swatch hopes to drive up these lost sales by entering a market that CEO Nick Hayek was skeptical about just two years ago. In fact, he went so far as to say he didn’t see the smartwatch as practical given its screen size. Now, he seems to have done a u-turn.
The upcoming smartwatch will connect to the Internet “without having to be charged,” Hayek said in a Thursday interview with Bloomberg.
A Swatch spokesperson went even further and in to more detail when he made a statement to CNET and other outlets”
Swatch will launch a new generation of its Swatch smartwatch in the next two to three months. Functions will include communication, mobile payments at stores such as Migros and Coop, and applications that work with Windows and Android — without having to be charged. Separately, Swatch will present its new Swatch Touch at the end of the month.
Both Migros and Coop are Swiss retailers which makes you wonder if the release of the smartwatch will be limited to Switzerland at the onset.
While this will be Swatch’s first smartwatch sold under its name it has a number of patents in the sector and has been supplying know-how and components to other smartwatch manufacturers which could help Swatch “enter” the market.
“So you can imagine that our brands and consumers will benefit from this know-how in 2015,” he said in an interview with The Wall Street Journal.