Swatch CEO won't 'rule out' his company is 'collaborating' with tech companies on smartwatches

Swatch emphatically denied a VentureBeat report earlier this summer saying that the watchmaker is collaborating with Apple on a line of smartwatches.

A new Reuters interview with Swatch CEO Nick Hayek does nothing to reverse that. But it does strongly suggest that conversations about partnerships with Apple and others have taken place — and that collaboration with some tech companies may be happening already.

“All the big technology firms want to work with us, and I don’t rule out that we are or could be collaborating in some areas …” Hayek told Reuters.

Hayek believes the tech companies want to partner with Swatch for marketing reasons. “[Technology firms] that want to strike partnerships with us also want access to brands. They want [their products] to be more than a commodity,” he said.

Swatch has long said that it believes it’s the time piece that sells watches, not the “smart” features like step counters and on-wrist messaging.

“Our first message for customers is the watch. If they like it, they might also be interested in the extra functions,” Hayek said. “It is a problem if you only define a product by its technology. Technology alone doesn’t sell, not in watches.”

Yet Hayek points out that Swatch sees smartwatches as an opportunity, and is prepared to “go it alone” in making them. Indeed, the watchmaker is preparing to launch its own smartwatch, called the Swatch Touch, next year.

Hayek says some new “smart” features might be enabled in Swatch devices through new Bluetooth technology. Presumably he’s talking about Bluetooth low-energy technology, which deals with the key limitation of smartwatch functionality — the life span and size of the battery.

Swatch shares have lost 15 percent of their value over the past year, and analysts say the threat of new smartwatches from companies like Apple and Samsung factor into the decline. Smartwatches represent a market worth $93 billion, analysts say.

The Swatch Group also has companies underneath it that produce touchscreens, batteries, and chips that could be used in smartwatches. One of the companies, EM Microelectronic, makes specialized microchips for watches.

“Low-power and low-voltage microchips are our specialty,” Michel Willemin, CEO of EM Microelectronic, told Reuters. “The Swatch Touch, for example, is the only battery-powered device to have a touch screen that is always active because its power consumption is so low.”

Swatch CEO Hayek said, “We work with many companies, but there’s no reason to shout it from the rooftops,” he said. “EM Microelectronic supplies tiny parts to many, maybe also Apple …”

Apple is expected to unveil a new smartwatch, or line of smartwatches, at a well-hyped event September 9.