Wireless Watches Open Another Door for Amkor's Advanced Mini/Micro Packaging Business
More People Are Wearing Technology On Their Sleeves
By ALFRED KUEPPERS and ALMAR LATOUR
Special to The Wall Street Journal Europe
BIEL, Switzerland - A century after the watch began its move from the pocket to the wrist, timepieces are beginning to do a lot more than tick. Watch companies are turning them into stylish wrist telephones, MP3 music players and even crude Internet access devices, presenting a challenge to makers of mobile phones.
Swatch Group Ltd.'s Access watches, which combine a programmable chip and an antenna that emits a radio signal, are being used as electronic passes at ski slopes, resorts and the public transportation system in Tampere, Finland. Next on the Swiss watchmaker's agenda is Swatch Talk, a watch that uses the European-wide GSM mobile-phone standard.
"People, and especially young people, are looking for cool technology," says Nick Hayek Jr., president of Swatch watches. "I bet with you: If I take Italy, where we have 51% market share with Swatch in volume, if you are sitting in a cafe wearing a nice Swatch and it rings and you say `Ciao!' well, the moment people see it" they will want one too.
The convergence of the watch and communications equipment threatens traditional handset makers, such as Sweden's Telefon AB L.M. Ericsson, which are facing new competition from consumer-electronics makers. Samsung Electronics Co. and Casio Computer Co., for instance, are bringing new applications of existing wireless technologies to the market at big volumes and at relatively low prices. By contrast, big handset makers, which for years sold phones in bulk to big state-owned telephone companies, among others, are only beginning to learn how to respond quickly to changes in customer tastes and style trends.
"Sony, Swatch, Nintendo are all becoming competitors to the Ericssons and Lucents of the world," says Gerald Maguire, professor of communication technology at the Royal Institute of Technology in Stockholm. "And they have much more experience making accessories for the masses. They know how to bring a commodity to the market fast."
To be sure, makers of telecommunications equipment will also benefit from increased demand for wireless products - whether handsets or wristsets - since this prompts more need for telecom infrastructure, in which Ericsson is a market leader. Handset makers are gradually learning to behave like consumer-goods producers. Nokia Corp. of Finland has turned its phones into stylish accessories in different colors and sizes.
Ericsson, meanwhile, recently unveiled a wireless flat-screen device that allows users to surf the Web, make phone calls and control household appliances and television sets. The Screenphone will hit the U.S. market before the end of the year.
"Brand competition is widening," says Jan Ahrenbring, an Ericsson spokesman. "That's why we are widening our product portfolio. Of course, there will always be a need for the underlying technology that we produce. Swatch is not developing its own wireless technology."
That doesn't seem to have stopped Swatch. The Swatch Access system, which first appeared on the ski slopes of Laax, Switzerland, in 1995, is used at more than 450 winter sports resorts. Season pass holders have their Access watches programmed so a radio-frequency receiving antenna recognizes they have paid up. Since radio frequencies travel through clothing, customers don't even need to push up their sweater sleeves.
"A lot of Tyrolers buy them, especially the season ticket holders," says Andrea Ullman, marketing director at Austria's Innsbrucker Nordkettenbahnen GmbH, which owns and operates ski resorts in Austria's Tyrolean Alps. "I have one myself, and I never forget it; a ski card pass is too much hassle. In fact, most everyone at our company has a Swatch." A third of season ticket holders at the company's resorts use the devices, which sell for 43.60 euros and up.
A similar gadget is offered to riders on Tampere's public buses, but only 500 of the 140,000 pass holders use them, according to Matti Rainio, head of planning at Tampere City Transport. Swatch says it is negotiating with public transportation authorities in Basel and Geneva to use the system.
In May or June, Swatch will market its Internet Access watch - but don't expect to be able to read e-mail on your watch. Instead, the device, called the Swatch net.invader, applies the same technology the company created for skiers. Web surfers scan the programmed watch over a Swatch mousepad containing an antenna and sensor, which reads the password and automatically lists the user's 10 favorite Web sites on the screen.
Mr. Hayek says the 85.77 euro to 111.19 euro watch and mousepad set isn't a gimmick, but the first step toward creating a Swatch that will act as a universal access key to an ever expanding array of devices, from computerized office equipment to telephones to pay-per-view airplane movies.
"At Swatch we have two directions (telephone watches and Access watches) that we are following. I see a big potential in the telephone watch, but I see a much bigger potential in the watch that is a key, that identifies you and brings you services," he says.
Though industry experts believe access technology will play an important role in the future, the jury is still out on whether Swatch will be at the forefront. "I don't think Swatch is recognized as the world's leader in access technology," says Daniel Rasmus, a vice president at Giga Information Group Inc., a consultancy that advises businesses on how to adopt new technologies to meet their needs. "Still, the Swatch Access watch is an early example of the possibilities of this technology."
Swatch Talk debuted at Germany's CeBIT exhibition in 1998, but the company didn't market it since it was too clunky to fit in with the fashionable Swatch product line. Over the past two years, Swatch miniaturized the watch and adapted it to the GSM mobile-phone standard.
According to Swatch, the watch phone will allow two hours' speaking time and a rechargeable battery good for 18 to 24 hours. The estimated price is 250 euros to 325 euros. Mr. Hayek hints that he will unveil the watch at the Olympics in Sydney in September.
Mr. Hayek dismisses his competitors, Samsung and Motorola Inc., as makers of "hand grenades" for the wrist. As a consumer, "you are looking for brands that have credibility in design and fashion as watches," says Mr. Hayek. "If you get a wonderfully designed watch that is a telephone, why should you take a technological (looking) watch from Samsung, which has no credibility in watches?"
Samsung acknowledges its watch phone is still in its infancy. "If someone hadn't made the very first dinosaur-like computer, we would never have been in a position to progress to today's notebooks and palmtops," the company said in a written response to questions. "We are confident that in the near future we will be able to produce models that are even smaller than traditional wrist watches."
Indeed, as wireless communication and data storing devices are getting smaller and smaller, the number of applications will grow as well. Technology will allow wristsets to soon double as electronic keys to a user's car, house or personal computer; mobile phones already are starting to resemble wallets and will soon contain built-in credit cards; and thanks to a new system called Global Packet Relay Service, machines will soon be able to ask for mechanical tune-ups or new supplies. "There is a lot of information that fits into a two-centimeter diameter," says Prof. Maguire in Stockholm. "Wireless technology will be everywhere it can be."
Samsung brought its 50-gram watch phone onto the market in Korea on April 1. It is expensive - about 655 euros - and currently available only through the Internet (www.anycall.co.kr).
Motorola displayed its Accompli Watchphone at this year's CeBIT convention, but is still considering whether to market the product. Other than the knobby antenna sticking out of the bottom, it is sleekly designed. Motorola also has designed a wireless videophone, which contains a tiny camera.
Like Samsung's rather bulky watch, Motorola's antenna makes its version tough to squeeze under the sleeve of a dress shirt. But Carmen Lietz, Motorola's product marketing manager for Germany, remains sanguine. "I think you wouldn't want to hide such a great product, you'd want to show it," she says, adding that the watch would probably fit under a sweater.
Casio plans to begin selling its wrist MP3 player (260 euros) and a wearable camera (270 euros) in May. The camera stores up to 100 photos, which can be loaded onto a home computer via infrared data exchange for printing. The wrist MP3 player can download 33 minutes of CD-quality sound from a personal computer and comes with headphones and a cable to connect with a computer. Both products also tell time. |
