INVESTMENT FOCUS-Luxury watchmakers seen resilient to smartwatch threat

* Smartwatch wave likely to help shares of tech firms

* Luxury watchmakers shares seen resilient to this trend

* Smartwatches typically target young audience

By Atul Prakash

LONDON, Nov 13 (Reuters) - A growing focus on smartwatches, called "wrist computers" by some, has brightened the stock price outlook of some tech groups behind the products, yet the trend is unlikely to have a material impact on the shares of top watchmakers.

Tech companies such as AMS (LSE: 0QWC.L - news) , which makes components for the Near Field Communication technology used for services such as contactless payments, and U Blox, which makes global positioning system (GPS) products, are best positioned to benefit from the trend, which is gathering pace after Apple (LSE: 0R2V.L - news) 's smartwatch offering earlier this year.

Shares (Berlin: DI6.BE - news) in both AMS and U Blox have risen nearly 10 percent so far this year, outperforming a 6 percent rise in the broader FTSEurofirst 300 index following recent announcements.

Several other watchmakers have entered into the race after Apple's product, which is expected to sell millions of units in the first year. Luxury products company LVMH's Tag (Other OTC: TAGOF - news) Heuer recently showcased a watch developed in collaboration with Google and Intel (Swiss: INTC.SW - news) , while U.S (Other OTC: UBGXF - news) . firm Fossil plans to acquire wearable technology innovator Misfit.

However, smartwatches are not expected to have any major impact, at least near term, on companies such as Richemont , which are mainly present in the high-end watch segment, a market not targeted by smartwatch makers.

"Fundamentally, I don't see it as a risk to the strong Swiss watchmakers as it's a completely different kind of purchase. A watch is a status symbol and tends to keep value unlike tech products. It (Other OTC: ITGL - news) 's more like a marketing exercise for brands like Tag Heuer," said Zuzanna Pusz, analyst at Berenberg.

"It's also worth looking at the positive side. The new generation may be less keen on wearing watches. But if they start wearing smartwatches they may at some point switch to a Swiss watch. This is why Tag Heuer offers an option to switch to a mechanical watch after some years by paying something extra," added Pusz.

Swiss company Swatch, however, could be hit because its range of products includes those priced below $1,000, although analysts see any impact as being only marginal.

"We are not talking about a sudden step-change in demand, this is a slow but steady disruption that we think will only increase over time and now thanks to TAG, this pressure has moved up to a high price point," Paul Moran, analyst and partner of Aviate Global, said.

"There is one company that still scoffs and refuses to engage with partners. That company is Swatch. This position is not sustainable."

Swatch shares are down nearly 20 percent this year, as analysts say the company faced challenges such as a sales drop in Asia and concerns about its earnings.

Swatch also plans to launch a smartwatch that can be used to make payments in Switzerland next spring. Its strategy appears primarily to revolve around including individual tech features in different models rather than going head to head with Apple to create all-in-one smartwatches combining many functions.

Globally, the size of the luxury watch market is about $40 billion. On the other hand, after a very modest development in the past four years, the smartwatch industry is expected to grow by nearly 600 percent in 2015, partly driven by the launch of the Apple Watch, but its size compared to the luxury market remains miniscule.

(Reporting by Atul Prakash; Editing by Sudip Kar-Gupta and David Evans)