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July 24, 2014

Wheelings & Dealings: Apple Potentially Partnering with Watch Makers to Deliver iWatches


For years now we have been hearing and reading rumors about Apple possibly developing and producing a smartwatch. We have seen drawings, lots of patent filings that involve technology that could be used in a wrist worn device. Throughout this period, Apple has never actually admitted that they were working on a smartwatch, or when, if ever, we would see one.

This summer we finally have word that before the end of the year there will be an iWatch in people’s future. Now that this part of the formula is about to become a reality, we have a few more rumors concerning Apple’s appearance in the wearable world of smartwatches.

According to a report from Venture Beat, we have new rumors concerning the iWatch. One suggestion is that Apple's once rumored smartwatch may not actually be built by Apple itself, but through established watch brands like Swatch and Timex.

While earlier rumors speculated that the iWatch would be an Apple-made product, just like the iPhone is Apple's smartphone, the latest round of rumors may indicate that Apple may be creating a smartwatch platform. If this is true, does that mean that rather than competing in the smartwatch area, Apple is poised to give Google’s Android Wear some serious competition?

Venture Beat quoted a source saying, "Apple has been working with at least one partner, Swatch, to release a line of smartwatches in variety of branded styles and price points. Apple and its partners will offer a family of smartwatches to suit all tastes ‘from geek to chic.’”

This could potentially open a very wide distribution channel for the iWatch. Swatch is considered to be the largest watchmaker in the world, operating under 18 different brands. It was founded in 1983 and that is when I purchased my first Swatch. In fact, I still have it and it runs perfectly after 31 years. All I have to do is replace the battery and it keeps perfect time.

While this does seem like a great business strategy, I find it hard to believe that after all of the secrecy, not to mention the fact that Apple likes to keep control of all its products, that Apple would hand over its smartwatch to be built my another company, even if that company is Swatch. Keep in mind that one reason it took so long for China Mobile to sell the iPhone in China is the fact that Apple did not want the carrier to make changes that would allow it to work on their network.

In fact, Ben Wood, who is the head of mobile devices at CCS Insight, a research firm, agrees, stating, "I find it difficult to believe that Apple would want to relinquish control. It would be a radical departure for Apple. They may partner with them to get some aspect of intellectual property, but Apple likes to control every aspect of the devices they make and that means owning it, controlling the message – its Apple’s brand."

In his interview with the Guardian, Wood added, "A number of the watchmakers like Pebble and Swatch may decide that they want to integrate with Apple’s Heath kit. Therefore they might be a partner, because they may have devices they’re going to announce which actually link into Health kit – a way of making the devices compatible with an Apple phone."

So, we have gone from a rumor that Apple might be working on a, and I stress the word “a,” smartwatch, to the possibility that Apple is working on several different versions of the iWatch that may or may not be built by a watch company. In addition, it seems that the focus of this device might be more on health and fitness.

Apple has hired a rather large team of health and fashion experts to work on the iWatch; does this suggest that much of the development work is being done in-house? Some reports have indicated that Apple will produce the iWatch in a variety of materials and at multiple price points, leading to the idea that this is to satisfy a wide range of tastes. Apple is also said to be marketing the iWatch as a fashion accessory.

Concerning a partnership, another source told Venture Beat, “The tech giant is interested in pushing its iOS, iTunes and Health Kit ecosystems to millions of wrists and in this case it’s not particular about sharing the branding glory to do so.”

If we look at this from another angle, 9TO5Mac reports that Swatch really doesn’t like the idea of Apple creating something called the “iWatch.” It seems that the two companies are currently tied up in legal proceedings over just that. Swatch already makes its own iSwatch and argues that Apple could damage its trademark by releasing a similarly named device.

Last year, Swatch CEO, Nick Hayek, had some negative things to say about the Apple iWatch. According to Hayek, Apple and Swatch have been in contact for several years concerning materials for products and energy harvesting technology. However, in March Hayek clearly stated that Swatch was not interested in forging a partnership with a company manufacturing wearable devices, including Apple.

So we have the end of one rumor, which just leads us to several more rumors. I would think that a partnership between these two companies could only be a benefit to both. However, with Hayek’s earlier comments and the fact that Apple likes to keep control of just about everything, we will have to wait and see how this all pans out.




Edited by Adam Brandt




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