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Google buys $40 million in new smartwatch tech from Fossil, acquires part of R&D team

Fossil Group, one of the most successful Wear OS smartwatch makers, has agreed to sell $40 million in smartwatch technology to Google. The deal includes intellectual property Fossil has developed, but will also include sending "a portion" of Fossil Group's research and development team over to Google. Fossil says it will retain more than 200 R&D team members after the transaction, and it isn't clear exactly how many are headed to Google.

Such a large move to acquire IP and R&D talent is, at a minimum, a strong signal from Google that it intends to keep developing Wear OS and other wearable technologies. It also comes in a time where Wear OS isn't necessarily a shining example of a great wearable platform. The transaction, which is expected to close in February, will obviously help Google further improve Wear OS and expand its capabilities both on a software and hardware level. It isn't yet clear how Google will choose to use the IP, keeping it in-house or licensing it out to partners, but given the quotes from the announcement my assumption is the latter:

"The addition of Fossil Group's technology and team to Google demonstrates our commitment to the wearables industry by enabling a diverse portfolio of smartwatches and supporting the ever-evolving needs of the vitality-seeking, on-the-go consumer."

Fossil Group offers smartwatches across several different brands, both owned and licensed, and has been responsible for a large amount of the growth of Wear OS (previously Android Wear) from the technology scene out into the fashion world. With this purchase, Google can take a leap forward in wearable development, and hopefully expand its offering to other brands and markets. My expectation is that Fossil Group will still continue to develop smartwatches at the same pace, and that may even include a licensing back of all the technology it just sold.

Fossil Group Enters Agreement To Sell Select Smartwatch Technology To Google

Transaction Unlocks Growth Opportunities for Fossil Group's Wearables Business

RICHARDSON, Texas – January 17, 2019 – Today, Fossil Group (NASDAQ: FOSL) announced its plan to sell to Google for $40 million intellectual property (IP) related to a smartwatch technology currently under development by Fossil Group. As part of the transaction, a portion of Fossil Group's research and development (R&D) team currently supporting the transferring IP will join Google. Fossil Group retains more than 200 R&D team members to focus on innovation and product development.

The transaction showcases Fossil Group and Google's shared investment in the wearables industry. In recent years, smartwatches have become Fossil Group's fastest growing category. The company successfully developed and launched smartwatches across 14 of its owned and licensed brands.

"Fossil Group has experienced significant success in its wearables business by focusing on product design and development informed by our strong understanding of consumers' needs and style preferences," said Greg McKelvey, Executive Vice President and Chief Strategy and Digital Officer, Fossil Group. "We've built and advanced a technology that has the potential to improve upon our existing platform of smartwatches. Together with Google, our innovation partner, we'll continue to unlock growth in wearables."

"Wearables, built for wellness, simplicity, personalization and helpfulness, have the opportunity to improve lives by bringing users the information and insights they need quickly, at a glance. The addition of Fossil Group's technology and team to Google demonstrates our commitment to the wearables industry by enabling a diverse portfolio of smartwatches and supporting the ever-evolving needs of the vitality-seeking, on-the-go consumer," said Stacey Burr, Vice President of Product Management, Wear OS by Google.

The transaction is expected to close this month.

Andrew was an Executive Editor, U.S. at Android Central between 2012 and 2020.

15 Comments
  • Did this also mean that we will get a better SOC
  • Fossil never developed its own SoC ... so no.
  • What's the point then without a good SOC it's a waste of time
  • Potential Pixel Watch on the horizon Andrew ? If not this year maybe 2020 ?
  • The soonest is coming is 2020 unless they reuse an already designed smart watch. They should take the time to make a good watch though. Learn from the competition and incorporate new things when needed or just like they did with Nexus and release test watches until one is good enough and brand it Pixel.
  • This move seems similar to how htc sold part of itself to Google.
  • Yeah I had the same thought in mind as well.
  • Pixel watch, here we go!
  • Google fit needs to be priority 1. Last year's big update brought it from a distant last place to an almost reasonable last place.
  • What's the difference lmao
  • There is a difference between finishing last, and finishing last while being lapped a couple of times.
  • Let's see.... Take the best features from Foosils version of wear OS and incorporate it into mainstream wear OS... Ie. The same thing Android does already to Android with Samsung innovations.
  • I hope they use Fossil watch designs.
  • Nice... Hopefully Google has learned from the mistakes of Android wear, and will do a more stable job maintaining WearOS. Google investing $40M in the smartwatch industry is a good thing. It shows they see growth and potential. I've been wearing a fossil gen4 explorist since mid Dec... No complaints at all.
  • I hope they use smaller buttons, ones that are harder to have accidental presses and holds. I used to reboot my Fossil accidentally because the buttons would get pressed while using hand tools.