Swatch signs deals for NFC payments in face of looming smartwatch threat
Swiss watchmaker Swatch has forged deals with banking firms to add NFC-based payments to its upcoming products, something that may be necessary to mitigate the threat of devices like the Apple Watch.
The Wall Street Journal reported on Thursday that Swatch has signed a deal with bank card association China UnionPay, as well as a Swiss bank and a major credit card provider. Speaking today during the company's annual media day, Swatch CEO Nick Hayek refused to identify the latter two parties.
Hayek did reveal more about the company's upcoming watch lineup, first hinted at earlier this year. Rather than build a true smartwatch, the company is planning to weave "smart" functions into its products. NFC will be featured in everything from lower-cost plastic models through to the higher-end Omega line, and support not just mobile payments but things like unlocking hotel rooms.
A new line announced on Thursday, Swatch Touch, incorporates functions such as a step counter.
"We are not a consumer technology company," said Hayek. "We don't want to produce a reduced, minimized mobile phone on your wrist."
Hayek has previously been dismissive about devices like the Apple Watch, but in recent times has changed his opinion. At today's event the Journal noted that the CEO called the Watch the nicest smartwatch he's seen, also contending that there's room for both Swatch and Apple products on the market.
Swatch could lose hundreds of millions of dollars if it fails to respond adequately to smartwatches, since roughly a third of the company's revenue stems from low- to mid-tier sales. One analyst, Luca Solca of Exane BNP Paribas, estimates that smartwatches could bite up to 10 percent out of Swatch's low-level sales in 2015, and as much as 5 percent out of mid-range brands like Mido and Tissot.
Such a scenario would deprive Swatch of about 500 million Swiss francs, or $499.86 million, out of a forecast 10.3 billion francs ($10.2 billion) in net sales for 2015.
The Wall Street Journal reported on Thursday that Swatch has signed a deal with bank card association China UnionPay, as well as a Swiss bank and a major credit card provider. Speaking today during the company's annual media day, Swatch CEO Nick Hayek refused to identify the latter two parties.
Hayek did reveal more about the company's upcoming watch lineup, first hinted at earlier this year. Rather than build a true smartwatch, the company is planning to weave "smart" functions into its products. NFC will be featured in everything from lower-cost plastic models through to the higher-end Omega line, and support not just mobile payments but things like unlocking hotel rooms.
A new line announced on Thursday, Swatch Touch, incorporates functions such as a step counter.
"We are not a consumer technology company," said Hayek. "We don't want to produce a reduced, minimized mobile phone on your wrist."
Hayek has previously been dismissive about devices like the Apple Watch, but in recent times has changed his opinion. At today's event the Journal noted that the CEO called the Watch the nicest smartwatch he's seen, also contending that there's room for both Swatch and Apple products on the market.
Swatch could lose hundreds of millions of dollars if it fails to respond adequately to smartwatches, since roughly a third of the company's revenue stems from low- to mid-tier sales. One analyst, Luca Solca of Exane BNP Paribas, estimates that smartwatches could bite up to 10 percent out of Swatch's low-level sales in 2015, and as much as 5 percent out of mid-range brands like Mido and Tissot.
Such a scenario would deprive Swatch of about 500 million Swiss francs, or $499.86 million, out of a forecast 10.3 billion francs ($10.2 billion) in net sales for 2015.
Comments
Desperation? Indeed!
This is fine with me. The more companies demanding NFC point of sale connections the better for Apple Pay. The only issue I see is whether US retailers will continue to keep this function turned off to push their lousy mobile payment (non)solutions.
That's an ugly Tissot.
The question is - Will Apple allow their app in the App Store since it duplicates native functionality?
The question is - Will Apple allow their app in the App Store since it duplicates native functionality?
NFC payments with a Swatch watch is not a feature of any Apple product.
One word: DISRUPTION.
No one does it better than Apple. Tim Cook is proving he can be just as disruptive as Steve Jobs. Cook is DISRUPTING luxury watches, payments, and soon TV and Cars. Anyone questioning Cook's abilities is high on weed.
I feel kinda sorry for the Swiss economy. Really do.
I think Apple may have done too much for the watch by adding so much tech into it like: Force Touch, multiple sensors (blood pressure, KGE...), digital crown sensor, pulse sensor for Apple Pay and last but not least, complicated metal processing. That's why the watch is priced so high. I look around the market and there is NO other watch that can even come close to Apple Watch in term of technologies.
They're all ugly, IMO.
The question is - Will Apple allow their app in the App Store since it duplicates native functionality?
NFC payments with a Swatch watch is not a feature of any Apple product.
Not sure what you are getting at. Do you see Google Pay, Google Wallet, Loop Pay in the App Store?
Funny how the traditional watch makers ignored or mocked the smart watch category...until Apple jumped in. Then a bead of sweat appeared on their foreheads. When that bead of sweat dripped down into their eyes their hands started to shake a little.
We’ve had all the usual suspects pontificating and bloviating right here in the AI forums about the uselessness of wearable tech. These are also the same ones who assured us that real work can only be done on a desktop PC don’t you know.
Now the release of the ?Watch is at hand and suddenly the industry players are realizing that the disruption of their market is on its way. What to do? What to do?
I look around the market and there is NO other watch that can even come close to Apple Watch in term of technologies.
And the question is, does everyone really need this much tech? I know I don't.
Watches are still very much a fashion and jewelry item. If other watch companies can integrate the things particular demographic groups want in a smart watch as part of traditional watch designs, then there's likely no reason to switch to a dedicated smart watch as expensive and complex as Apple's offering.
Apple is doing what it always does which is push the industry toward the future, which tends to make life better for everyone, not necessarily put everyone else out of business.
Could Swatch be following in BlackBerry's footsteps?
Not sure what you are getting at. Do you see Google Pay, Google Wallet, Loop Pay in the App Store?
The deal is for nfc payments within swatch watchs in their upcoming 'smart' lineup. Swatch has no reason to add value to the apple watch via a payment app.
Not sure what you are getting at. Do you see Google Pay, Google Wallet, Loop Pay in the App Store?
It's not App Store no-duplicates policy keeping them out (why do you think there are so many alternative email apps or browsers on the App Store despite iOS already packing an email app and a browser)?. The bigger issue is the lack of a public API for the NFC subsystem.
Sorry still not following. Their watch should have its own NFC but it would need an app to input the cards, to control it and authenticate, at least I would assume. You know, just like the ?Watch does.
I know about the other browsers but I believe Apple decides on a case by case basis whether or not they will allow an app and in the case of a payment app I would think they might not.
Maybe, maybe not. But if the watch I am wearing now (I think I paid about $200 for it, maybe $300, I don't know) could handle notifications and payments, I'd be happy. And maybe others will also. Apple Watch is an incredible feat of engineering, no doubt. But it's god awfully ugly, poor little thing.
sounds like a compromised product.
Not quite a smartwatch but still more expensive than a standard watch. Makes no sense.
This is like having a smartphone have a rotary dialer. Its time to leave the past in the past.