On January 17, Google and Fossil Group revealed that Google would pay $40 million to acquire intellectual property related to smartwatch technology currently under development. The deal will also include Fossil transferring some of its R&D team to Google.
According to Google, the result will be a "new product innovation that's not yet hit the market". It explained that the new product line will be based on technology that the Fossil Group has evolved on top of the Misfit acquisition. Fossil bought Misfit for a reported $260 million back in 2015.
Generally, it takes a more vertically integrated firm to produce beautiful looking products: see Apple and its success in integrating software and hardware to create devices that they sell at higher margin because of the superior user experience. It’s become clear that the strategy of Google developing WearOS and using third-party OEMs to get it to market isn’t going to work. To compete with the Apple Watch, Google is going to have to build its own, Google-branded watch. It’s what they’ve done with the Pixel Phone, though that effort is likely too little too late. It remains to be seen if they’re too late to wearables as well. Pixel Watch, anyone?
Wareable has the scoop and the whole story.