Watch Industry Facing Microsoft Entry Shock

Hey all, i found this story a lil bit ago and thought to myslelf, "hey AO would like to read this" isit just me or does this seem like the first watch in history that when you buy it youll have to call a number for daylight savings times and youll be charged everytime you set the time?
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By Reed Stevenson and Daisuke Wakabayashi

SEATTLE/TOKYO (Reuters) - Faced with the entry of a new deep-pocketed rival, watchmakers and companies that make a range of devices that Microsoft Corp. wants to wire with its own "smart" software see both an opportunity and a threat.



Microsoft Chairman Bill Gates (news - web sites) announced on Wednesday that the world's largest software company was mounting a new push to move beyond personal computers and into everyday objects using technology Microsoft calls SPOT, for Smart Personal Objects Technology.


SPOT-enabled watches and everyday objects such as refrigerator magnets will carry software that will allow them to display snippets of information, such as an upcoming appointment, phone numbers and weather forecasts, Gates said.


"I think this has been an obvious area of interest for someone in the electronics field," said Wilson Keithline, Director of Advanced Products at privately held Timex Corp.


Middlebury, Connecticut-based Timex already sells a watch called Data Link that works with Microsoft software to retrieve scheduling and contacts information from a personal computer.


Data Link works by having a special sensor on the watch read flashing bars of light on a computer monitor, much like Morse code transmitted at a distance with light signals.


Microsoft plans to have its watches receive data over FM radio spectrum that it leases, a system it calls DirectBand. The watches could start at $150 and would also have features such as automatic updating from an atomic clock.


"The technology that Microsoft decided to use requires someone with very deep pockets," Keithline said, "They've come out with a really neat technology.


Asked if Timex would work with Microsoft on smart watches, Keithline said: "We have partnered with Microsoft in the past on several products. We're always interested."


Microsoft announced that it was developing watches with Japan's Citizen Watch Co. Ltd. -- one of only three large global timepiece makers already selling radio-controlled clocks -- and U.S. watchmaker Fossil Inc.


NOT FIRST TO MARKET


Microsoft may be grabbing headlines by recalling the futuristic designs popularized by fictional comic book detective Dick Tracy, but Japan's Casio Computer Co Ltd., the world's top maker of digital timepieces, said "smart" watches are nothing new.


The maker of the shock-resistant "G-Shock" watch and its fashionable, younger sibling the "Baby-G" said it first introduced the radio-controlled wrist watch in 1996 and plans to sell over one million "Wave-ceptor" watches this year.


Casio said the "Wave-ceptor," which also tunes into an atomic clock through radio waves to ensure complete accuracy, is outpacing demand for timepieces capable of taking color photos or navigational watches equipped with satellite-based Global Positioning System (news - web sites) (GPS).


"Demand for color photo or GPS watches has not been so great since those functions are now readily available on mobile phones," said Casio spokesman Toshihiro Watanabe.


Redmond, Washington-based Microsoft won't even be the first software company to seek a market for intelligent wrist-borne devices.


Handheld computer software maker Palm Inc.'s PalmSource software unit has also shaken hands with Fossil to create a metal-banded wrist watch that sports all the features of a personal digital assistant, including a touch screen and plenty of memory to hold thousands of addresses and events.


"Microsoft speeches always sound wonderful when you first hear them," said Michael Mace, Chief Competitive Officer at PalmSource, "It'll be necessary to actually play with these things to see."

"Definitely we think there is a good opportunity for putting information into a small device... But we're shooting for a very different target. We're shooting for a very capable device in a very small form factor," Mace said.

Mace said that one key to widespread use and cooperation from watchmakers would be in adopting an open design that allows other software developers and hardware makers to innovate and develop new applications for smart watches.

Indeed, it is generally accepted that the global watchmaking industry churns out about a billion watches a year, or one for every six people on earth.

"If we get five percent or 10 percent of people who have watches, it's a huge, huge number," Microsoft's Gates told Reuters in an interview.

(Additional reporting by Ben Berkowitz in Las Vegas)