Tag Heuer developing luxury smartwatch with Google, Intel

The smartwatch will have Android Wear and Intel technology

Most of the smartwatches we've seen so far have come from technology companies, but Swiss watchmakers are joining the game.

The latest is Tag Heuer, which announced Thursday that it's developing a luxury smartwatch with Intel and Google. The watch will ship this year and run Google's Android Wear OS.

Other details, such as pricing, weren't immediately available. Android Wear watches from Lenovo, Asus, Sony and Samsung are cheaper than the upcoming Apple Watch, which starts at $349 but will sell for up to $17,000.

For decades, Swiss watches have been revered for their precision and craftsmanship. Rolex has resisted the smartwatch game so far, but Tag Heuer and Swatch are introducing products without abandoning their mechanical roots.

It's still not clear how much of an appetite there is for smartwatches. Gartner has said they'll account for 40 percent of consumer wrist-worn devices by 2016.

Swiss manufacturers will try to make headway by trading off their respected brands, said Matthew Bain, founder of Matthew Bain Inc., a fine-watch collecting company.

"I think it will be hard to compete with the technology of Apple," he said.

Getting into the market makes sense for Tag Heuer, if only to see how well a product will sell, said Chris Hooper, founder of Windy City Watch Collector, which collects and sells new and vintage timepieces.

Tag Heuer probably can't develop smartwatch technology internally, so working with Google and Intel makes sense, Hooper said.

Smartwatches are only the latest development to threaten the Swiss watch industry, which has had to reinvent itself multiple times in more than a century of existence. The introduction of quartz watches in the late '60s and the influx of low-cost watches from Asia in the '70s both hurt Swiss watchmakers, who adapted to the changing market.

"The Swiss watchmakers have done a very good job of reinventing themselves, but also selling to the public the cachet of a finely made mechanical watch," Hooper said.

They'll be observing the market closely to see how much demand really exists. Swiss watches are often sold as collectibles to be passed down through generations, while smartwatches can be made obsolete with a software upgrade, Hooper noted.

Smartwatches are multifaceted instruments for more than just telling time. They send reminders, collect health information, browse the Web, and notify users of text messages, phone calls and Facebook posts.

While Silicon Valley companies have focused on technology, Swiss manufacturers can use their brands and craftsmanship to make smartwatches more alluring.

Success depends on a good design and a good brand as much as on functionality, said Mike Bell, general manager at Intel's New Devices Group, in a recent interview.

"As more traditional watch brands come out with smartwatches, you'll see acceptance because it's going to be an extension of a brand that people already like, as opposed to a computer company saying 'hey, I took a cell phone and taped it to my wrist and it's a smartwatch'," Bell said.

That's Intel's hope, but only time will tell.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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