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Fossil Expands Android Wear Lineup With 2 New Models

By Evan Niu, CFA – Mar 15, 2016 at 4:30PM

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The watchmaker is quickly moving to become a smartwatch maker.

Image source: Fossil.

What happened?
Fossil Group (FOSL 0.11%) announced today that it is adding two new smartwatches to its Android Wear family. The Q Wander and Q Marshal will be the latest additions to the company's Q portfolio, and be available between early summer and fall of this year. Both smartwatches will start at $275. The differences are primarily aesthetic, with Q Marshal being more rugged. The devices will join Fossil's current Q Founder smartwatch that also runs Android Wear.

Does it matter?
While Fossil makes a wide range of personal accessories, none are more important to the company's financial results as watches. Watch revenue last year totaled $2.5 billion, or over 76% of Fossil's overall revenue. Leathers and jewelry make up most of the rest of the business. But the company's core watch segment is under pressure, as sales fell 10% in 2015.

Meawhile, smartwatches are very much growing as a product category, riding the current wave of wearables adoption. Last year was a turning point for smartwatch adoption following the launch of Apple Watch. Fossil knows that in order to stay relevant, it needs to adapt and embrace wearables, which is precisely where these Android Wear devices come in.

Evan Niu, CFA owns shares of Apple, and The Motley Fool owns shares of and recommends the stock. The Motley Fool recommends Fossil. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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