Alphabet Inc.’s (GOOGL) subsidiary Google is buying smartwatch technology worth $40 million from Fossil Group (FOSL). The sale involves technology currently under development and as per the agreement, a part of Fossil’s R&D team who are working on the technology will transfer to Google. The transaction is expected to close this month.
Fossil stated that smartwatches have become its fastest-growing category and they have been rolled out across 14 of its owned and licensed brands.
Fossil and Google are already partners and together provide smartwatches that use Google’s wearable operating system, Wear OS. The wearables space is dominated by the likes of Apple (AAPL) and Fitbit (FIT) and Google is yet to find a foothold here. Although the details of the technology are not clear, there is a chance that Google and Fossil might soon roll out an innovative product that could boost its capabilities in the wearables business.
Greg McKelvey, Executive Vice President and Chief Strategy and Digital Officer, Fossil Group, said, “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. 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’s stock is up 3.2% while Alphabet’s shares have dipped slightly by 0.17%.
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