On January 17, 2019, Fossil announced a $40m sale of smartwatch intellectual property (IP) to Google. The deal is centered on smartwatch IP acquired when Fossil purchased activity tracker company Misfit, an expert in health and fitness technology. A portion of Fossil's R&D team, which has helped develop hundreds of hybrid and smartwatch models, is also part of the deal. Although Google created the smartwatch wearable operating system Wear OS (initially named Android Wear), the company has yet to produce a Pixel smartwatch.
A successful Google smartwatch will help attract more partners to the Wear OS platform
Since the inception of Google's wearable operating system in 2014, initial adopters including Sony, Asus, and Samsung have stopped using the operating system. Although the purchased Fossil tech likely includes some activity tracker–focused features such as fitness and health, Google will need to focus its efforts on integrating these features into a smartwatch to showcase the strengths of its operating system.
Qualcomm's Snapdragon Wear 3100 chipset, optimized for the Wear OS platform, was released in mid-2018 but is only present in two devices so far (including Fossil's Sport Smartwatch). The 3100-enabled Fossil Sport Smartwatch allows for up to 24 hours of battery life and offers near-field communication (NFC) payments, an upgraded ambient mode, heart-rate monitoring, and integrated GPS. Google will need to utilize the chipset upgrade to produce a Pixel smartwatch that fully capitalizes on the breadth of Wear OS's features, paving the way for other smartwatch vendors hesitant to invest in the latest Wear OS–associated chipset. Although Fossil's current offerings don't include cellular connectivity, Google's smartwatch will likely have cellular capabilities in the US, thanks to operator partnerships through Google Fi.
Fossil, a traditional watchmaking company, has continued to earn dividends from its wearables investments and acquisitions. The company's fashion-forward intersection with smartwatch tech can help Google differentiate its smartwatch stylistically from the offerings of key competitors Huawei and Samsung, which have naturally taken a tech-first approach to watchmaking.
Wearable Devices Tracker: 3Q18, CES004-000059 (November 2018)
"Fossil's turbulent 1H17 business may become another blow to the wearables industry," TE0004-001193 (August 2017)
Rishi Kaul, Research Analyst, Consumer Technology