Will Swatch Corner the Wearables Market?

Bacon Watch.

Bacon Watch (heart monitor not included). Source: walkyou.com

Up until February 5, 2015 it seemed like all companies who could make a wearable computer “put their cards on the wearables table” except Swatch Group.  Swatch had everything needed to do it, but it chose not to until it’s 5 Feb announcement: a watch with an NFC chip that can make payments.

And now Swatch’s competitors may be screwed.

The amount of money spent by other companies on wearables to design, market and produce smart watches runs into the many millions … perhaps billions of dollars.  Apple, Microsoft, Samsung, Motorola, and Nike, etc are at risk: they won’t get their money back if they can’t sell enough  product.

Those companies’  sales plans can be destroyed by a competitor who finds a way to sell a cheaper watch that does enough of what people want.

And that might easily happen with a company like Swatch Group doing the disrupting; this company has already mastered market penetration for all demographics in wearable devices.

While other companies have to ramp up production lines and find shelf space, Swatch’s changes to watches will be incremental to its existing product line.  Much easier and potentially less costly by comparison.

And now finally after all those other companies committed vast treasures bringing smart watches to market, they have to compete a space that is new to them, and old hat to Swatch.  And I think last month’s announcement will do the trick for Swatch.

Are you a watch snob who thinks Swatch Groups’ watches will fail because they’re inferior to Apple’s?  It doesn’t matter.  It’s not about what you value.  It’s about how many watches a company can sell.  Swatch’s success will be Apple’s torment.  Simple.

Swatch is in such a sweet position market wise it’s not even funny.

It’s choosing to limit it’s wearable tech to a few core functions.  The other companies didn’t seem to understand the importance of that.   Swatch Group seems to want watches to remain watches, but add some basic functions that make sense – like payments, NFC and bluetooth.  Nike took a similar approach with its Fuel Band, which is a basic smart watch.  But Nike Fuel Band lacks NFC capability so far, and I’m guessing that Nike wants to focus on licensing Nike Fuel to other companies … as opposed to helping people buy Big Macs.

Swatch Group’s idea is simple.  Turn watches into payment machines.  Literally cash generating devices.  And that’s all.  Simple.  Genius.

People are going to ask themselves,

Should I spend $400 on an Apple watch, or ..

$150 on a Swatch and put $250 on the payment chip so I can buy stuff?

At the end of the day, any wristband device is limited by what it can do.  It doesn’t make sense to add bulky batteries or huge screens.  Add too much functionality, and you risk making the user feel like they’re doing surgery on their wrist just to pull up stock quotes.

The more complicated watches like Apple’s watch and Microsoft’s band pose that risk.

But it’s also helpful to see other technologies that have been successful with the minimalist approach.  Take Disney’s Magic Band for example.

Disney Band

Disney Magic Band. Source: disney.com

Disney Magic Band. Source: disney.com. Image copyright not by me.

Disney’s Magic Band is an incredible device.  It’s a proven incredible device, that lets consumers get what they want … an easy, less involved shopping experience.  It cuts down on waiting in lines and talking to cashiers.

And it helps Disney transfer money from consumer to Disney.  So, it’s a win-win for everyone.

And now with Swatch entering the arena, we could see something like the Disney experience expand throughout the planet.


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