The US$40 million Fossil deal gives Google the technology to create its own branded watches and compete against Apple and Samsung Galaxy.
With smartwatch sales taking off globally, Google has agreed to pay US$40 million for the smartwatch technology of the fashion and accessory group Fossil.
As part of the deal, Texas-based Fossil Group‘s research and development team working on the smartwatch will join Google, which will acquire the intellectual property for Fossil smartwatches, the firms said, ABS CBN reported.
With the smartwatch market growing – North America alone has seen a 40% jump in sales during Q2 2019 for a market value of US$2 billion – the deal gives Google the technology to create its own branded watches and compete against Apple and Samsung Galaxy.
“Wearables, built for wellness, simplicity, personalisation and helpfulness, have the opportunity to improve lives by bringing users the information and insights they need quickly, at a glance,” said Stacey Burr, a vice president at Google Wear OS division.
“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.”
Greg McKelvey, chief strategy and digital officer at Fossil, said in the statement: “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.”
Fossil moved into smartwatches in 2015 with a US$260 million acquisition of Misfit, a tech platform created by former Microsoft researcher Sonny Vu and the ex-Apple CEO John Sculley.
The worldwide market for wearable devices grew 31.4% during the fourth quarter of 2018, reaching a new high of 59.3 million units according to data from the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. Shipments for the entire year of 2018 grew by 27.5% with 172.2 million wearables shipped. Much of this growth was attributed to the growing number of ear-worn devices as they captured almost a quarter of the market during the year, IDC reported.
“The market for ear-worn wearables has grown substantially this past year and we expect this to continue in the years to come,” said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. “It is the next battleground for companies as these types of headphones become a necessity for many given the exclusion of headphone jacks from modern devices. Add to that the rise of smart assistants and in-ear biometrics and companies have the perfect formula to sell consumers on a device that’s complementary to the device ecosystem that lives on their wrist and in their pocket.”