Business Notes TIMEKEEPING

Once upon a time, high-quality watches ticked, had mechanical movements (hand- wound or self-winding) and almost always came from Switzerland. But that was before the onslaught of Japanese quartz watches dealt a near deathblow to the Swiss industry. Now Swiss watchmakers, who survived by converting to quartz technology, plan to turn back the clock.

The timely move is being led by Societe Suisse de Microelectronique et d'Horlogerie, originator of the popular quartz Swatch Watch. The company has - produced six prototypes of a mechanical, self-winding version of the Swatch, which will probably go on sale next year for about $40. Though quartz models constituted 90% of Swiss-made watches last year, the mechanical versions could account for half of all sales in 1990.

The revival has two motives. One is that the tiny batteries needed to power quartz watches are not widely available in Third World nations, where the Swiss want to expand exports. The other is competition from an unlikely source: the Soviet Union. Clunky Soviet watches -- often made with Swiss tools bought a decade ago -- are now the rage in Europe.