Luxury brands hedge their bets with smartwatches

23 Mar 2015 | Author: | No comments yet »

A timely choice: Luxury watchmakers bet on smartwatch competition with Apple.

The flurry of technology deals luxury watchmakers announced this week to tackle the Apple Watch threat are more a way to hedge their bets in case the smartwatch market takes off than a strategic U-turn. BASEL, Switzerland: Luxury Swiss watchmaker TAG Heuer announced Thursday it was joining forces with technology behemoths Google and Intel to develop a smartwatch that can compete with the new Apple Watch.Apple TV rumors weighed on cable companies, and Tesla said it has plans to ease drivers’ “range anxiety” — this is your tech rewind of the week.

Swiss watchmakers sincerely hope that the approach most of them seem to be taking—great watches with a little tech—will be enough to see off Apple—great tech with a watch’s form factor. The costs of development of these hybrid watches, combining elements of traditional watchmaking with digital know-how and wireless connectivity, will be mostly financed by the technology providers, industry specialists predicted. The timepiece, which aims to combine Swiss watchmaking know-how with high-end technology, is expected to hit stores by the end of the year, TAG Heuer chief Jean-Claude Biver told the Baselworld watch fair. “Silicon Valley and Switzerland are going to conquer the market of the connected watch,” he told a press conference at the world´s largest trade show for timepieces, in the northern Swiss city of Basel. Therefore, the partnerships unveiled at the Baselworld fair actually involve little investment for luxury brands – aside from their marketing efforts – but represent potentially high returns in terms of image and sales. Biver, an industry legend who also leads the watch division of TAG Heuer´s owners LVMH, did not reveal how much the watch would cost or which functions it would feature.

On Thursday, LVMH’s Tag Heuer and Bulgari, and Kering’s Gucci were among the more than dozen or so watch brands that announced partnerships with technology companies. In a statement, the three companies said their partnership “signifies a new era of collaboration between Swiss watchmakers and Silicon Valley, bringing together each company´s respective expertise in luxury watchmaking, software and hardware.” Guy Semon, TAG Heuer general manager, added that when renowned Swiss watchmaking “is allied with the creative technology and the global power of two companies like Intel and Google, using the Android Wear platform and based on Intel technology, we can see the launch of a technological revolution in our industry.” David Singleton, head of engineering for Android Wear, said Google was “thrilled” with the project, telling the news conference the three companies were ready to “a better, beautiful, smarter watch.” The California company is reportedly going to charge $20 to $40 a month to let you stream live TV to all your Apple devices, and grant you access to a bundle of about 25 networks. The timing was also dramatic: on the second day of Baselworld, a convention where centuries-old Swiss houses still unveil limited-edition artworks for the wrist that can cost more than $200,000. But while the announcement helped Tag Heuer make headlines and project the image of a brand in tune with its times, the project has many limitations, and could, in fact, fail to ever yield a product, Windsor said.

After the announcement, however, Jean-Claude Biver, chief executive of TAG Heuer, said that the smartwatch is in keeping with an industry built on intricate mechanical timepieces. (After all, the pedigreed Swiss watchmaker has always positioned itself as forward-thinking; TAG stands for “Techniques d’Avant Garde.”) “It’s like haute couture and prêt-à-porter, or it is like buying a Smart car from Mercedes, or a 600S,” Mr. Many luxury watchmakers, including Patek Philippe and Breguet, said this week smartwatches were incompatible with their brands’ values and the timelessness of their products.

On Thursday, Guido Terreni, the managing director of Bulgari Watches, stood on a stage in front of an invited audience all sipping flutes of Veuve Clicquot champagne and announced that in 2015, BaselWorld was marking the year of the smartwatch. The Californian computer company provided the first glimpse of its watch during Paris fashion week and photos were taken of designer Karl Lagerfeld and US Vogue editor Anna Wintour admiring it in the trendy Parisian shop Colette. You can own both.” The idea is not to market the TAG Heuer smartwatch over, say, a roughly $5,000 TAG Heuer Carrera chronograph with a Calibre 1887 mechanical movement.

Bernstein luxury analyst Mario Ortelli said the tech industry “seems to be endeavouring to shape the world into an egalitarian utopia, with themes such as shared economy (AirBNB, Uber), and democratization of information until it is universally accessible (Google)”. The electric car maker unveiled an in-car app that will notify Model S drivers on when it’s time to recharge their batteries, as well as guide them to the nearest power station. For example, Breitling, the aviation-oriented Swiss luxury maker founded in 1884, has been showing off a prototype called B55 Connected, which connects to an iPhone via Bluetooth and offers familiar smartwatch functions, like a lap timer, in addition to apps specific to pilots, like an electronic tachometer and flight-time tracker. Movado recently hired a general manager of wearable technology to explore potential designs, said Mary Leach, chief marketing officer of the Movado Group.

Even Swarovski, one of the more fashion-forward brands at Basel, enthusiastically talked about the Swarovski Shine, a touch-sensitive motion tracker embedded inside a crystal that can be worn in nine ways. Windsor also noted it was not the first time Tag Heuer experimented with electronics as it introduced a mobile phone called Meridiist in 2008 which “eventually sank without a trace”. Shazam CPO Daniel Danker spoke with FOX Business’s Jo Ling Kent and discussed why the music discovery company is going physical with a brick-and-mortar presence.

Their websites suck, theirs apps are terrible and almost any attempt they’ve made in the past at integrating cutting-edge tech into their products have been forgettable. While Lyft and Uber continue duking it out, the first rideshare service designed specifically for busy families, Shuddle, this week announced a $9.6 million Series A funding round. The digital photo discovery company plans to use this round to fuel international growth, and according to Re/Code is working on a “buy” button, confirming future e-commerce plans.

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