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Apple Watch Targeted by Swiss Watch Makers (NASDAQ:AAPL)

apple inc (NASDAQ:AAPL) watch

Apple Inc. is hoping to market a touch-free solution of its own in Apple Pay on Apple Watch, but Swatch has beaten it to put forward a foot in the Chinese payments industry. The world biggest watch maker by revenue unveiled Bellamy, an NFC-toting watch that can process the mobile transactions from UnionPay (credit card operator) and the state-owned Bank of Communications Co.

apple inc (NASDAQ:AAPL) watch

 

Apple still to win a deal in China

More importantly, the watch maker has got a head start on Apple. The iPhone-maker has a mass appeal and huge installed customer base, making it a potential threat to the traditional watchmakers.

Bellamy does not have internet connectivity, and is priced at 600 Yuan i.e. $95 and, so, it is not a direct rival to Apple’s wearable. Swatch launched its new product in partnership with UnionPay, which is the only viable processor of NFC payments, says a report from the Wall Street Journal. The deal not only grants the Swiss firm a deal with China’s Bank of Communications, but also gives it unfettered access to the country’s mobile payments infrastructure.

In March, Swatch CEO, Nick Hayek, announced the UnionPay deal saying that the firm plans of slowly integrating ‘smart’ features into its brands, and it will start with NFC capabilities. It is unlikely that Swatch will come up with a full-fledged ‘smart-watch,’ Hayek said, adding that the firm has no plans to build health tracking functions into its line-up.

For more than a year now, Apple Inc. has been making attempts to strike a deal with UnionPay, but the talks reportedly stalled in February. It will be tough for both Apple and UnsionPay to reach a deal as there is an impasse over the usage rates, and Apple is not agreeing to store customer data on in-country servers, says Apple Insider.

Tag Heuer preparing Apple Watch rival

While Swatch has beaten Apple to mobile payments in China, another Swiss firm is confident of beating Apple Watch. Though Apple Watch has been popular, and has affected many leading watch makers, Tag Heuer CEO Jean-Claude Biver, believes that Apple has priced its luxury watch too high, and it will be difficult for it to sell those.

Biver said Apple Inc. will face a lot of difficulties in selling any connected device priced higher than $2,000. A watch becomes obsolete after 5 to 10 years, and no one would like to spend $10,000-$20,000 on a watch, whose technology will be outdated in sometime, Biver said.

The Swiss luxury watch industry intends to win back the customers it has lost to Apple Watch, and for this, it is taking a leap from its traditional production model, Biver told CNBC. The Swiss firm will soon launch a $1,800 Android-powered smartwatch to take on Apple Watch.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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