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Swatch Group AG plans to start selling a smartwatch in the next three months, potentially pitting the Swiss maker of colorful plastic timepieces’ debut directly against Apple Inc.’s Apple Watch.

Swatch Store in Zurich | Source: Shutterstock

ZURICH, Switzerland — Swatch Group AG plans to start selling a smartwatch in the next three months, potentially pitting the Swiss maker of colorful plastic timepieces’ debut directly against Apple Inc.’s Apple Watch.

The timepiece will communicate via the Internet “without having to be charged,” Chief Executive Officer Nick Hayek said in an interview. The Swatch smartwatch will also let consumers make mobile payments and work with Windows and Android software, he said.

Hayek is ready to go head-to-head with Apple, which has scheduled its smartwatch introduction for April. The market for such timepieces, which enable phone or data communication, will probably reach about $10 billion in 2018 from as much as $1.8 billion in 2014, Citigroup Inc. analysts forecast last year, with half of the market in the future coming from traditional watch wearers switching to the devices.

Swatch has decades of experience developing technology that might go into a smartwatch, such as long-lasting batteries so thin they’re bendable. The company’s Tissot brand has made watches with touch-screens since 1999 that now offer an altimeter, a compass, and sensors to record a diver’s descent.

Record Patents

Hayek has been skeptical about the smartwatch’s potential. Two years ago he said that he didn’t think the smartwatch would be a “revolution” for the industry. He has repeatedly voiced concerns watch screens are too small for communicating and that smartwatches might need too much charging. Last year he said Swatch won’t participate in a race to be first in developing the products because of consumer resistance.

The Biel, Switzerland-based company said its patent applications reached a record in 2014, adding it will be reflected in “numerous innovative project launches in all segments” this year. Such patents include batteries based on new materials that can double their performance, Hayek said.

“We’ll implement all of those into new products,” Hayek said. “Some of them, such as the battery, will take a few years though, and are also destined for other industries, like the automotive industry.”

The company is in talks to get more retailers accepting the Swatch smartwatch’s payment system after agreements with Switzerland’s two largest retailers, Migros and Coop, Hayek said. The device will enter the market in two to three months, he said.

The Apple Watch will feature health-tracking features and other applications for maps, photos, and messages. Apple CEO Tim Cook also rolled out a mobile-payment system last year.

Swatch today reported full-year earnings that missed analyst estimates as it boosted investment and struggles with the fallout of the stronger Swiss franc.

By: Corinne Gretler in Zurich; editors: Celeste Perri, Thomas Mulier and Paul Jarvis.

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