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Is Google's Rumored Pixel Watch Dead?

By Evan Niu, CFA - Sep 19, 2019 at 3:00PM

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The smartwatch may have been killed off years ago.

The booming smartwatch market is helping drive soaring shipments in the broader wearables market. Apple (AAPL 1.89%) continues to lead the way with its category-defining Apple Watch, which all competing smartwatches are inevitably measured against. "Compared to the rest of the smartwatch market, the Apple Watch Series 5 is in a completely different league," The Verge writes in its review of the latest iteration.

Rumors continue to swirl that Alphabet (GOOG 4.41%) (GOOGL 4.16%) subsidiary Google has a Pixel Watch in the works. However, the search behemoth might have actually killed off the gadget years ago.

Five Wear OS smartwatches

Third-party Wear OS smartwatches. Image source: Google.

Don't expect a Pixel Watch next month

Business Insider reports that Google hardware chief Rick Osterloh actually axed the first-party smartwatch back in 2016, shortly before the company's "Made by Google" hardware event in October of that year. Google unveiled its first generation of Pixel phones and Google Home smart speakers at that event.

Osterloh had just been named head of Google's nascent hardware business a few months prior, and shuttered numerous initiatives including Project Ara, which was exploring modular phones, according to the report. Google had partnered with LG to manufacture its smartwatch, but Osterloh was reportedly dissatisfied with the device's aesthetic, as well as its functionality. LG would proceed to release the smartwatches under its own brand in 2017.

Perhaps most importantly, no Pixel Watch is expected to be unveiled this year, according to BI's sources. Earlier this week, Google announced its hardware event is scheduled for Oct. 15.

Then why did Google just buy smartwatch tech?

The report makes Google's acquisition of smartwatch tech from Fossil for $40 million in January seem bizarre. That deal included intellectual property (IP) that the accessory maker was working on, as well as part of Fossil's R&D team. Fossil has been one of Google's most consistent and loyal Wear OS partners, and watches are the consumer discretionary company's biggest segment.

"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," Wear OS chief Stacey Burr said in a statement at the time.

Why would Google scoop up smartwatch IP if it wasn't building a Pixel Watch? It was never clear what kind of IP the company acquired, but it's worth noting that Google again changed strategic course in hardware just two months later when it reportedly started ramping down its tablet and laptop efforts. Osterloh subsequently confirmed that his team was bailing on tablets but still pushing forward with laptops.

Wear OS has largely been supplanted by other platforms, including Samsung's Tizen and Fitbit's FitbitOS, so maybe it's better for Google to sit this one out.

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