MSN's Smart Watch taking time to catch on

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Microsoft Corp.'s first step into lifestyle consumer products has gotten off to a teetering start.

Positive reviews for its Dick Tracy-like wrist computer, the MSN Direct Smart Watch-which offers stock quotes, sports scores, news and other data-have been outweighed by critical blasts from techies and fashionistas. As one reviewer put it, the timepiece's only fashion statement is "I'm a geek." Another said the watch, instead of making him feel dashing like the comic-book detective, simply made him feel "silly."

While no official numbers are available from Microsoft or analysts on sales, some have begun to question the watch's start. "The sales are not staggering," said Richard Doherty, analyst, Envisioneering Group.

The watches range in price from about $100 to almost $300. Smart Watch gets its information from FM radio frequencies and requires the purchase of a $10 a month or $60 a year service agreement from MSN.

Launch strategy involved broad distribution, providing for MSN Smart Watches with different capabilities, styles and prices to be sold at more than 30 major retail chains nationwide ranging from Nordstrom, Marshall Field's and Fossil to Comp USA and Radio Shack online. In addition, Microsoft partnered with Suunto, a Finnish firm selling high-end sports watches.

A spokeswoman for Fossil, which is partnering with Microsoft in the watch's development, did not provide sales details but indicated the watch is selling better at tech hangouts than at mainline department stores.

Low level of support

Jeff Ingram, Suunto's director-sales, said sales were going "very well," and that newer versions of the watch, including one that offers a heart-rate device, are in development.

Analyst Mr. Doherty said he was surprised about the low level of marketing support Microsoft has put behind the product so far, estimated at about $15 million for the first quarter. Advertising, from Interpublic Group of Cos.' McCann-Erickson, San Francisco, has consisted of small-space newspaper ads, radio and billboards in seven cities with illustrations of the watch customized to show off its features, such as stock closing prices.

To generate buzz among urban early adopters, Omnicom Group's Spike DDB, New York, developed "Secret Agent," a Web flick accessed through the Fossil and MSN sites, among others. It features a handsome man being followed by a beautiful woman as he walks around a bar checking his watch for stocks and basketball scores; he's eventually joined by director Spike Lee. Neither the watch nor Microsoft are mentioned by name.

Cindy Spodek Dickey, director-marketing for Microsoft's Smart Personal Object Technology, said the company soon will "ramp up big numbers in a big way" as the product line expands to new channels with added watch lines with new features as well as a new target.

Still, Mr. Doherty, whose watch doesn't get full service at his Nassau County home outside Manhattan, said the clock is ticking for Microsoft. "It gives pause to other manufacturers in areas Microsoft is not in yet," he said. "Tick tock. Tick tock."

contributing: claire atkinson

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