NEW YORK • LVMH's Tag Heuer became on Monday the first Swiss watchmaker to offer a smartwatch to customers that combines Swiss design with American technology, seeking to tap a growing market for wearable devices amid flagging sales of traditional watches.
Co-developed with Google and Intel, the Tag Heuer Connected will cost US$1,500 (S$2,100). One thousand units are available in 15 stores across the United States, with Britain, Germany, and Japan following in the coming days.
With its titanium casing, black rubber strap and digital watch hands, it is designed to look like a classical watch.
But Connected houses an Intel Atom processor beneath its touchscreen that lets wearers connect to the Internet, stream music and run applications via Google's Android Wear platform, from favourites such as Google Fit and Google Maps to customised lifestyle and sports apps.
The watch, which electronically tethers to a phone, responds to voice commands and finger swipes. It can give the weather, set up a calendar reminder and tell the wearer how many steps she or he has walked that day, for instance.
The Connected will compete in part against Apple's Apple Watch, which has breathed life into the smartwatch category. With prices from US$350 to US$17,000, it competes with some traditional luxury timepieces.
Tag Heuer chief executive Jean-Claude Biver described the Connected watch as a way to get new customers and warm them up to traditional watches.
"The Apple Watch will never be eternal," he said at an event in New York. "Our watch will. It's a big advantage."
Customers can swop their smartwatch for a mechanical one at the end of a two-year warranty if they pay US$1,500 more, a strategy that Mr Biver said allows the company to protect its traditions and cater to younger clientele who might be tempted by Apple.
Asked about potential sales of the new product, he said: "I don't really know... I have only the gut feeling that we're just at the beginning and that the first (connected) watches are like the first phones we had 20 years ago."
Makers of traditional Swiss watches have largely stayed on the sidelines of the emerging smartwatch market.
But the industry needs a boost. Swiss watch exports posted the biggest drop since 2009 in the third quarter, with a 14.5 per cent slip in the 200-franc (S$280) to 500-franc category, fuelling concerns that the Apple Watch might be taking market share.
Bank Vontobel analysts last month forecast that low- to mid-market watches would be affected by sales of smartwatches and other wearable devices and that 30 to 50 per cent of quartz watches would include some smartwatch features in the long term.
Switzerland's biggest watchmaker, Swatch Group, has some connected products under its Swatch and Tissot brands, but has rejected making a "telephone" or "computer for the wrist", as its chief executive Nick Hayek told a paper in August.
Swatch has also eschewed big tech partnerships, which Mr Biver said were needed to launch a smartwatch such as Connected.
"If you want to offer a smartwatch as sophisticated and complete as the Apple Watch, that is practically impossible for a Swiss company alone," he said. "We cannot develop microprocessors to that level."
"Many Swiss watch brands are not keen on partnerships. We were keen because I believed that my price range could be hit by the competition of smartwatches," he added.
The Tag Heuer Connected is, at least initially, being produced at Intel manufacturing sites. It comes without the coveted "Swiss Made" tag, but with the labels "Intel Inside" and "Swiss Engineered" on the watch case.
The partnership with Intel and Google was announced in March. Mr Biver said the partners shared development costs, but gave no details.