Last week, Swatch Group AG announced plans to enter the smart watch race in the coming months.  The timing of Swatch’s smart watch will likely pit it squarely against smart watch release of another tech heavyweight in Apple. After a number of smart watch launches in 2014, the momentum shows no sign of abating with a slew of smart watch debuts likely in 2015, including from Swatch’s competitors in the watch space such as Tag Heuer. 

The details of Swatch’s smart watch are sketchy, media reports indicate that it will be NFC-enabled and will feature a battery that will not require charging.  It will also most likely work with Android smartphones.  Keeping these features in mind, the Apple vs Swatch showdown can get pretty interesting.

Given that both watches will be NFC-enabled, mobile payments will be a key use case for both watches.  Apple will have a slight edge on account of Apple Pay and its partnerships with mobile payment stakeholders, especially in the US where the iPhone enjoys strong market share. 

Swatch Group may be well-known for its watches, but it enjoys strong competencies in areas such as sensor and battery technologies.  Given that Apple’s smart watch will likely require frequent charging, Swatch enjoys a strong advantage on the battery front.  Charging a smart watch frequently is a strong deterrent for potential smart watch buyers and Swatch can score a big win here.

Apple’s ecosystem is a big advantage and the strong developer support will further strengthen Apple’s lead over Swatch.  Swatch will have to be very focused in its strategy and be able to clearly articulate its value proposition to its target market to combat Apple’s ecosystem advantage.

Swatch and Apple will have different takes on the design of their smart watches.  Apple is known for its elegant design with strong emphasis on seamless user experience.  The smart watch will probably be no different.  It will however have a strong technology focus.  Swatch on the other hand will be much more focused on the fashion quotient and aesthetics.  

To sum it up, this is not a zero-sum game.  Apple and Swatch both have strong brand loyalty and they target different customer segments.  The odds of one eating the other’s lunch are small.  If Apple and Swatch can both live up to their reputations and deliver products that can appeal to their target customers, the smart watch as a product category may finally fulfill its decades old promise as a viable product category and emerge as the eventual winner.

Parks Associates' upcoming report titled "Smart Watch: Extending the Mobile Experience," will provide a comprehensive analysis of the smart watch market landscape and trends.