Fossil, once a big time traditional watch manufacturer, has been struggling in the new “smart” age. With Fossil selling fewer and fewer traditional watches, the company has seen its share price drop quite a bit. The company saw its share price drop about 25% in a single day, after the company announced its earnings for the second quarter of 2017. In that quarter, losses were a bit less than many had expected, new sales decreased about 13% which translated to $88.6 million. However, Fossil is betting big on smartwatches and hybrid watches currently, and are making a ton of smartwatches for 2017. In fact, Fossil is planning for around 300 watches in 2017, through its different brands.
Fossil’s CEO Kosta Kartsotis stated that in Q2, “the strength of our wearables product, particularly in key brands, once again demonstrated that wearables have the ability to help mitigate the ongoing softness in the traditional watch category and ultimately, we believe, turn current headwinds into tailwinds.” It’s interesting that Kartsotis believes that smartwatches are able to save Fossil, seeing as the smartwatch market has pretty much plateaued already. With many customers not buying these smartwatches, seeing as they don’t have a real use-case, like a smartphone would. But companies like Fossil are betting the farm on smartwatches in the hopes that it becomes the next smartphone. But companies still need to determine a more broad use-case for these smartwatches, as currently they are still fairly niche products.
With Android Wear 2.0, Fossil should have a pretty compelling portfolio of products across all of its brands. That includes Michael Kors, Diesel and many others. Fossil is currently the largest smartwatch maker, by number of different products. Fossil is all in with Android Wear 2.0 for its smartwatches, with its hybrid watches just being smart under-the-hood but being a traditional watch on the face of things. Fossil is still poised to announce a ton of new smartwatches before the end of the year, especially if it does plan to hit that 300 product mark for 2017. Of course, Fossil won’t make all of those announcements, as its brands will also be announcing a number of these products.