Swatch Group AG (UHR), the world’s largest watchmaker, said it’s not working with Apple Inc. (AAPL) on a smartwatch, damping speculation that boosted the shares as much as 4.2 percent, the most in five months.
VentureBeat yesterday reported that Apple and Swatch are working together to release a line of watches in various brands, styles and prices, citing a person familiar with the matter it didn’t name. Swatch shares pared gains after the denial.
“Swatch is not working with Apple on smartwatches,” the company said by e-mail. The term generally refers to timepieces that can send and transmit messages, data and phone calls.
Swatch has said it’s not racing to expand in that market segment even as Apple could add as much as $11 billion in annual sales by selling a smartwatch, according to a forecast by RBC Capital Markets. CEO Nick Hayek has said he sees “big resistance” from consumers as such devices would need to be charged too often, have displays that are too small to read comfortably and could have data-privacy issues.
Swatch shares traded 2.6 percent higher at 513 francs at 11 a.m. in Zurich.
“The shares had been advancing today both on a rebound from recent losses and from what was perceived as good news -- an alliance with Apple on a smartwatch,” Jean-Philippe Bertschy, an analyst at Bank Vontobel AG in Zurich, said by phone. “Investors were very keen on such a story. There were some worries recently that an Apple smartwatch would put pressure on Swatch’s lower-segment brands like Swatch and Tissot.”
Apple plans to release a smartwatch in the fourth quarter, the New York Times reported last month, citing people familiar with the matter. The newspaper said Chief Executive Officer Tim Cook is interested in a watch that can monitor health indications, such as heart rates.
Apple has an “incredible pipeline” that “we can’t wait to show you,” Cook said on a conference call earlier this week.
To contact the editors responsible for this story: Celeste Perri at firstname.lastname@example.org Thomas Mulier, Tom Lavell