Faced with the entry of a new deep-pocketed rival, watchmakers and companies that make a range of devices that Microsoft wants to wire with its own "smart" software see both an opportunity and a threat.
Microsoft chairman Bill Gates 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.
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, on the other hand, plans to have its watches receive data over FM radio spectrum that it leases, a system that Microsoft 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."
Not all are chosen
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."
While Microsoft announced that it was developing watches with US watchmaker Fossil and Japan`s Citizen Watch, other major watchmakers such as Timex, Casio Computer and Seiko were noticeably absent.
Redmond, Washington-based Microsoft is not the first software company to seek a market for intelligent wrist-borne devices.
Handheld computer software maker Palm`s PalmSource software unit has also shaken hands with Fossil to create a metal-banded wristwatch 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 will 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 are shooting for a very different target. We are shooting for a very capable device in a very small form factor."
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 5% or 10% of people who have watches, it is a huge, huge number," Microsoft`s Gates told Reuters in an interview.
(Additional reporting by Ben Berkowitz in Las Vegas.)
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