Google paid $40 million for a mystery piece of smartwatch technology from fashion brand Fossil

Hollis Johnson/Business Insider

• On Thursday, Google announced a $40 million deal to purchase smartwatch technology from the fashion brand Fossil.
• As part of the deal, Google will also acquire part of Fossil's R&D team that currently supports the mystery tech which neither company has given much detail about.
• Fossil exec Greg McKelvey hinted that the deal with Google will result in a "new product innovation that's not yet hit the market."
• Google doesn't yet make a smartwatch of its own, but the deal could signal a growing commitment on the company's part to wearable hardware.

On Thursday, Google announced a $40 million deal to purchase intellectual property from the fashion brand Fossil in order to bring new smartwatch technology to the company's wearable platform - Wear OS.

As part of the deal, Google will also acquire a portion of Fossil's R&D team that currently supports the mystery tech which neither company has given much detail about.

Complimentary Tech Event

Transform talent with learning that works

Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

Fossil says it will still retain more than 200 of its own R&D employees to focus on innovation and product development.

In an interview with Wareables, a blog devoted to smartwatches and similar technology, Fossil EVP and chief strategy and digital officer Greg McKelvey hinted that the deal with Google will result in a "new product innovation that's not yet hit the market."

McKelvey also said that the innovation evolved from technology it obtained from its acquisition of the wearable technology company Misfit for $260 million in 2015.

Google's Stacey Burr, VP of Product Management of Wear OS, told Wareables that the deal focused primarily on bringing the new tech to the entire Wear OS ecosystem.

"We saw some technology that they were developing that we thought could be brought out in a more expansive way if Google had that technology," she said. "It's about bringing great features to the widest numbers of on-the-go consumers."

Read more: The best wearable we saw at CES 2019

Google has long partnered with Fossil on smartwatches, lending its Wear OS operating system to the fashion brand. Fossil is just one of several partner companies that use Wear OS in their watches - companies like LG, Tag Heuer, and Movado all use Wear OS technology as well. Google doesn't yet make a smartwatch of its own, but this deal could signal a growing commitment on the company's part to wearable hardware technology.

Get the latest Google stock price here.