Fossil inked the $40 million deal with Google to improve its cash flows, alleges a new report. Per the folks over at Wearables, the watchmaker tried to kill two birds with one stone. However, it seems just like another one of Fossil's rushed decisions, where it sold its hybrid watch technology to the internet giant for less than what it was worth.
It all started in 2015 when Fossil swallowed Misfit. Of course, the takeover meant that the company also got new employees.
In the beginning, the deal proved to be good for the watch manufacturer, raking in a significant amount of revenue. However, from there on the company's expenses reportedly started to spiral out of control.
Google Was Apparently More Interested In Acquiring Talent Than The Hybrid Watch Technology
With the 2015 deal, Fossil also got rights to a hybrid watch technology known as Diana which was built by Misfit. Now, Diana is the watch movement that Google acquired back in January.
As the name indicates, a hybrid watch contains both digital and analog elements. Compared to a full-fledged smartwatch, this movement is more power-efficient. There are supposedly different variants of Diana, including some without displays.
It's up to Google which version it wants to use. Per an insider, the deal was terrible, as Fossil's technology was worth much more than $40 million.
And that's not all. As you might recall, Google also got the employees that created this technology as a part of the deal. It appears that this was an innovative bunch of employees. Apparently, it was this group of employees that Google was more interested in than Diana itself.
Google's Future Wearable Plans Aren't Exactly Known
What exactly Google wants the team of twenty engineers to accomplish isn't exactly known. It seems like the new hires are working on the rumored Pixel Watch that we might get to see on October 15 during its hardware event.
After all, WearOS hasn't really caught on with other manufacturers, so making a gear to go with it sounds like a good idea. In any case, the wearables market is ripe for growth and Google will most likely want a piece of it.
All Fossil is left with now are a few engineers in San Francisco that overlook legacy deals with other companies. Other than that, the company has some staff in its Vietnam office. So, why did it part ways with the Misfit team?
First of all, they commanded high salaries and the company wanted to lower its operating expense. By bundling them in as a part of the deal, Fossil got rid of them without having to fire them. And it wasn't just about the salaries.
The core Fossil team and the employees that came from Misfit had polarizing ideas and this caused resentment.
As far as Google's own smartwatch is concerned, patents that have been spotted reveal that the Mountain View giant has several designs in mind.
Apparently, the company is also considering a wearable with a built-in camera. However, if we will actually get to see the Pixel Watch this October remains to be seen.