Fossil Group is set to sell its intellectual property related to a smartwatch technology currently under development to Alphabet Inc’s Google for $40 million.
The sale will see a portion of its research and development team currently working on the technology moving to Google. The deal is expected to close in January, Fossil said.
“The addition of Fossil Group’s technology and team to Google demonstrates our commitment to the wearables industry,” Stacey Burr, vice president of product management at Google’s Wear OS, a smartwatch platform, said.
Fossil, which recently launched a new offering called Sport that comes with Wear OS, said smartwatches have become its fastest growing category.
“Together with Google, our innovation partner, we’ll continue to unlock growth in wearables,” Greg McKelvey, Fossil’s chief strategy and digital officer, said.
Watches are forecast to reach 72.8 million units in 2018 with smartwatches accounting for roughly two thirds of the total volume. Total watch shipments are expected to reach 120.2 million by 2022 with a CAGR of 13.3 percent.
WatchOS, among the smart wearable operating systems, will remain in the lead although its share will decline from 44.4 percent in 2018 to 35.8 percent in 2022 as other platforms gain traction, says IDC.
The second largest OS is expected to be Android with 22.4 percent share in 2022. WearOS, the open-source platform, will capture 19.8 percent share in 2022.