Google is acquiring Fossil's smartwatch technology in a $40 million deal, a strategic move to save the dying Wear OS.

The deal, however, is intriguing to some tech analysts because the Fossil Group is successful in developing their smartwatch technology, which has an impact on future features.

Fossil 'Plays A Key Role'

Fossil is one of the successful smartwatch brands that are using Google's Wear OS software. It is competing with Apple Watch, but it struggles to get a large market among consumers. However, Fossil Group said that its smartwatches are the fastest-growing product category.

"Make no mistake, Fossil plays a key role," said Ramon Llamas, research director of Devices and Displays team at International Data Corporation.

Llamas said that Google's Wear OS needs a champion that could reach not just the tech enthusiasts, but also the already-hungry market segment who are regularly buying and upgrading their watches. He made example of Samsung and Android on platform and device category.

Llamas also mentioned the sub-brands of Fossil Group, which are just like Kate Spade and Michael Kors that appeal for women and Diesel for men.

"And that has been a significant contribution for Google," said Llamas.

Wear OS smartwatches got the biggest chunk of the wearable tech market in 2018. According to Wired, IDC's Quarterly Wearable Devices Tracker estimated a total of 4.4 million Wear OS smartwatches was sold in 2018 against Samsung Tizen watches that sold 4 million units, and Apple Watches that sold 21.7 million units.

A $40 Million IP Deal

It doesn't exactly say what Google is getting from the $40 million IP deal with Fossil. Reports only say that this technology has something to do with Fossil Group's acquisition of Misfit, a fitness tracker maker. Tech analysts believe that the health and fitness will be in the equation in order to catch up with Apple, Fitbit, and other wearable health tech start-ups.

Misfit's technology mainly focuses on sleep tracking and steps, so it would be possible that Google and Fossil Group would develop a smartwatch that integrates these features.

Fossil Group's share in the stock market has jumped about 8 percent on the news. The watchmaker firm said the deal with Google is expected to close in January.

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