Would you buy a smartwatch from a watch company?

Swatch's move into the smartwatch market challenges the conventional wisdom of what wearable computing is all about.

Moto 360

Moto 360 smartwatch.

It's becoming the biggest question in wearable computing – will the future of smartwatches be determined by tech companies making watches or by watchmakers adding technology?

Last week, Swiss watch giant Swatch revealed that it's planning to release its own smartwatch within the next few months. Known for cheap, colorful designs, Swatch is hardly a high-end luxury brand, though it owns a few of those (including Tissot, which has some smart-ish watches in its line).

According to what Swatch CEO Nick Hayek said to Bloomberg, the device will communicate via NFC and won't have to be charged (most likely powered by a replaceable watch battery). It will also support mobile payments and work with Windows and Android smartphones (no word on iOS).

And, of course, I recently wrote about MontBlanc's smart watchband. Other traditional watchmakers are also working on smart devices, including TAG Heuer.

Computers that tell time? Or souped up watches?

Now, I can't speak to how well any of these devices will function, or even how awesome —or how stupid— they'll look when you wear them out to dinner. But despite the intense hype surrounding the upcoming Apple Watch, I think that the battle over your wrist between tech companies and watch companies will be tougher than either side is expecting. (Not to mention the fitness tracker side of things.) I also think that the results of that competition will reveal a great deal about the wearable computing market's potential directions.

If Apple and other tech companies trounce their traditional competitors, that will announce the arrival of a truly new market. Not so much smartwatches as computers you wear on your wrist that may tell time, they may function as status jewelry as an added benefit, but not a core feature. The winners will be the companies that deliver the best functionality and usability, not the most style or prestige.

If the watch companies score a decisive victory, or even manage to stay competitive, then the situation becomes far more complex. That will mean that while some folks will go all tech and others add a touch of tech to their fancy timepieces, the real opportunity will lie in the middle.

One tip off to how the battle is going could be whether the most popular smartwatches look like watches as we know them, or like something new that just happens to be located on our wrists. The more smartwatches try to resemble familiar watches, the more opportunity for the traditional watch companies. But the more people choose form factors derived from timepieces, the better for the tech companies, and perhaps the fitness trackers.

Luxury carmakers point toward the future

To capture that sweet spot in the market, smartwatch makers from either side of the aisle are trying to meld high-tech function with high-end style and luxury. That won't be easy, and the model for success may not come from tech or timepieces.

The real place to look for inspiration may be the automobile industry, where global luxury brands from Audi to Tesla successfully charge astronomical prices for products that combine cutting-edge performance and world-class style and prestige—without actually getting their owners from here to there much faster than a 10-year-old Kia.

I'm not convinced that Swatch or Apple or any other company in the business is really ready to pull off that feat. But we're about to find out.

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