Swatch links with Chinese banks for UnionPay watch
Swatch Group is linking up with China’s banking giants to sell a timekeeper that can make payments and challenge Apple and Samsung's smartwatches.
Swatch Group AG is linking up with China’s banking giants to sell a timekeeper that can make payments at retailers across the country, posing a challenge to Apple Inc.’s and Samsung Electronics Co.’s smartwatches.
Swatch UnionPay watch to challenge Apple and Samsung smartwatches
The timepiece will allow users to make payments at stores that have China UnionPay Co.’s point-of-sale machines, according to the Biel, Switzerland-based company which is also teaming up with Bank of Communications Co., one of China’s big-five banks.
Retailing for 580 yuan ($91), the device called Swatch Bellamy will be sold in China at Bocom and Swatch outlets from January next year and later rolled out in Switzerland and the U.S., Chief Executive Officer Nick Hayek said at a briefing in Shanghai on Wednesday. A near-field communication chip beneath the dial lets the device function in a way similar to a bank card.
Talking about why the watch was being sold in China first, Hayek said that while Swatch always considered its home territory of Switzerland first, “my God, it takes months and months and years” to do something new with Swiss banks.
The introduction of the watch comes as Swiss watchmakers have struggled with a shrinking Chinese market since the country’s government started discouraging exuberant spending among officials in late 2012. With the Apple Watch on sale for as little as $349, traditional watchmakers are adding electronic functions to their own products.
Game Not Over
“It is important for Swatch to have its own version of the ‘smartwatch’, as Apple and other technology companies seek to build beachheads on the left wrist,” Luca Solca, an analyst at Exane BNP Paribas, wrote in a note on Wednesday. “This is one game for Swatch in a match which is clearly not over.”
The product adds to the competition faced by Apple and Samsung’s smartwatches, which have payment capabilities but aren’t linked in to the Unionpay network.Wearable devices could top $32.2 billion in sales by 2019, up from $18.9 billion last year, estimates researcher IHS, whose forecast includes devices like hearing aids.
Cie. Financiere Richemont SA offers intelligent watch-straps under the Montblanc brand for 350 euros ($399) each, while LVMH Moet Hennessy Louis Vuitton SE has said it will introduce a $1,400 TAG Heuer smartwatch later this year. Apple is also looking to add a touch of luxury to its smartwatch, evidenced by its collaboration with Hermes to make bands for the Apple Watch.
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.
China’s mobile payment transactions jumped 134 percent to 22.6 trillion yuan ($3.6 trillion) in 2014, according to the central bank. UnionPay, once the nation’s monopolized payment network, faces rising competition from third-party payment service providers including Alibaba Group Holding Ltd., while foreign firms such as Apple and Samsung Electronics Co. are also eyeing the Chinese market.
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