Fossil Group has announced that it is selling $40 million of intellectual property (IP) related to smartwatch technology to Google.
As a result of the news, Fossil's shares jumped about 8 percent on Thursday (January 17), according to CNBC.
In recent years, smartwatches have become Fossil’s fastest growing category — it 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,” Greg McKelvey, executive vice president and chief strategy and digital officer of Fossil Group, said in a press release. “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.”
As part of the transaction, which is expected to close this month, some of Fossil’s research and development (R&D) team will join Google, while Fossil will keep more than 200 R&D members to focus on innovation and product development.
“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.
New data has shown that global shipments of wearable devices is expected to reach 189.9 million units in 2022.
“The transition from basic wearables to smart wearables will continue over the next five years as the two approach parity in terms of market share by 2022,” Jitesh Ubrani, senior research analyst for International Data Corporation (IDC)'s Mobile Device Trackers, said in a press release. “The rise of smart wearables will not just be in mature markets, but also from emerging markets in Asia/Pacific and elsewhere.”