Swatch Chief Executive Officer Georges Nicolas Hayek recently announced that instead of adopting Android Wear, the Biel, Switzerland-based company is developing a proprietary smartwatch operating system that will debut on a Tissot-branded wearable in late 2018. The son of Swatch founder Nicolas Hayek stated that successful watchmakers need to "think small" when it comes to designing contemporary wearables, which is why Swatch is now working on an extremely lightweight OS that will allegedly offer approximately six months of battery life and be much more secure than its alternatives. The OS is being developed in collaboration with the Swiss Center for Electronics and Microtechnology (CSEM) and on top of claims of incredible security, Swatch CEO also boldly stated that the upcoming platform won't require regular software updates.
While the aforementioned "think small" philosophy could be seen as an extension of Hayek's father's initial strategy that saw Swatch — then known as SMH — triumph over its Japanese competitors in the 80s by releasing a simpler but more accessible product than traditional quartz watches, there's a reasonable chance it won't work this time around. The main issue is that Swatch CEO is either forgetting or ignoring one crucial difference - the company helmed by his father didn't try to beat its rivals at their own game. Deciding against adopting Android Wear and instead opting to directly compete with it could easily work against Swatch in the long run as the Swiss company can hardly hope to deliver an OS that's as versatile as that of Google's in the next 18 months, even with CSEM's help.
Hayek's father managed to turn Swatch into a major player in the industry with a simplified mechanical watch, but smartwatches hadn't existed on the market when he did that. In contrast, the Swiss company is now seemingly trying to reinvent the wheel by deciding against using a comprehensive and popular platform like Android Wear and looking to develop a closed ecosystem similar to Apple's watchOS. Hayek's claim of infrequent updates also indicates that SwatchOS or whatever the company ends up calling its upcoming wearable software likely won't support third-party apps, which seems like a huge downside that consumers will hardly overlook.
Even if one entertains the notion of Swatch managing to come up with a completely closed yet objectively superior alternative to Android Wear and other contemporary wearable platforms, the company that last year recorded $7.5 billion in sales with a profit margin of less than eight percent hardly has the financial pull to back a serious competitor to Google, Apple, and Samsung, i.e. Android Wear, watchOS, and Tizen. While Hayek said SwatchOS won't require regular updates — thus implying it will be cheaper to maintain — chances of that promise being fulfilled seem low, especially in the context of the Internet of Things (IoT) segment that's still suffering from a broad range of vulnerabilities despite the fact that it's backed by the largest tech giants on the planet. Swatch is ultimately making a huge gamble that could either see the company fail to create a safe alternative to Android Wear and other wearable platforms, or create a platform that's secure, but simply too limited to compete with its contemporary rivals.
Overall, Swatch's decision to ignore Android Wear and reinvent the wheel at a time when the company's financial performance is declining along with the rest of the Swiss watch industry may be a mistake and a knee-jerk reaction to the market that Hayek insisted on ignoring until recently. Back in 2013, the Swatch CEO said he doesn't believe smartwatches will be the next revolution in consumer electronics and while that claim hasn't exactly been refuted to this date, the Swiss company is now not only jumping on the smartwatch bandwagon late in the game but is also choosing to do so in the hardest way possible - by ignoring Android Wear as the most obvious entry point into the smartwatch market and deciding to do its own thing. One doesn't have to look too far in history to find examples of such strategies going wrong; both BlackBerry and Nokia made similar mistakes in the past and decided to ignore Android in favor of simultaneously competing with Apple and Google's platform, ultimately losing on both fronts. Despite having much more financial resources than Swatch, neither company is yet close to recovering from its mistakes, so if Swatch intends to invest a majority of its cash into this cause, it might be going down a similar path.
With that said, it's still unclear how much of its resources Swatch is committing to its wearable OS project, so only time will tell whether the Swiss watchmaker ends up authentically mimicking BlackBerry and Nokia's slip-ups or if it succeeds against all odds. Regardless, one thing is seemingly evident - SwatchOS could be a big mistake that Android Wear will eclipse as Google's platform has already established itself as by far the most viable option for entering the smartwatch market that cannot be ignored, at least not if you're a manufacturer of mechanical watches that's looking to make its first foray into wearables.