Fossil Group Inc. (NASDAQ: FOSL) has agreed to sell intellectual property related to smartwatch technology to Alphabet’s (NASDAQ: GOOGL) Google for USD 40 Million, the Company announced on Thursday.
Shares of Fossil jumped 8% following the announcement.
The deal will bring a portion of research and development staff from the Fossil Group to Google and will result in a new product range within the smartwatch market.
The intellectual property that forms the deal is based around “new product innovation that’s not yet hit the market,” Greg McKelvey, Executive Vice President and Chief Strategy and Digital Officer of the Fossil Group, said. The IP is technology that has grown out of USD 260 Million deal that saw Fossil purchase Misfit at the end of 2015.
It’s based on something out of our timeline,” McKelvey said. “It’s new to the market technology and we think it’s a product that has features and benefits that aren’t in the category today.” He added that, despite the sale, Fossil is still working closely with Google on developing the technology and is planning to launch new devices based on the innovation across its numerous fashion brands.
“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 of Wear OS by Google.
The Fossil Group has a huge range of branded smartwatches on the market – such as the Q Founder, Marshal and Explorist. At the tail end of 2018, Fossil boosted its smartwatch range with new HR features and was one of the first to feature the new Qualcomm Snapdragon Wear 3100 SoC into a smartwatch with the Fossil Sport. The group has also announced partnerships with the likes of Puma and BMW, who have signed deals to launch smartwatches this year.
There is no word on when these new smartwatches will arrive. However, the companies said the deal should be finalized this month.