Fossil, a longtime partner of Google, is getting $40 million from the California giant for its smartwatch technology.
The Richardson-based company said it has entered into an agreement for intellectual property related to a smartwatch technology under development, the company said in a statement on Thursday. As part of the transaction, some of the research and development team will join Google, which is part of Alphabet (Nasdaq: GOOGL).
Fossil (Nasdaq: FOSL) said it will keep more than 200 research and development employees to focus on innovation and products. The transaction is expected to close this month.
The North Texas company, founded more than 30 years ago, was an early partner with Google's efforts to bring mobile technology to watches as it battles with Apple over wearable devices. Fossil was mentioned as brand that would be using the Android software for its products. The announcement Thursday signals Fossil has become an important player in the industry's technology.
“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,” said Greg McKelvey, executive vice president and chief strategy and digital officer, Fossil Group. “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."
Shares of Fossil jumped about 8 percent at 12:13 p.m. CT after the company made the announcement.
“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, in the statement.
Smartwatches have become Fossil’s fastest growing category, the company said. It’s developed and launched smartwatches across 14 of its owned and licensed brands.
This isn’t the first time Fossil has made a strategic move with tech-powered watches. In 2011, Fossil spun out a business that sold $200 “connected” wristwatches that used Bluetooth to communicate with mobile phones that use Android operating software.
