Fossil stressed that it wasn't bowing out of smartwatches. There are still "more than 200" R&D staffers, the company said, and it promised to "continue to unlock growth" in smartwatches with Google's help.

Google isn't shy about its motivations. This shows its dedication to smartwatches, and will help by "enabling a diverse portfolio" of connected wristwear. It wants to see Wear OS thrive, and that means drawing on the experience of one of its best-known partners.

The question is what this means for Google's own device strategy. The company did acquire part of HTC to improve its in-house smartphones, but this doesn't necessarily mean that Google will make its own smartwatches -- it has typically shied away from its own watches in favor of working closely with partners like LG. It could just as easily use Fossil IP to improve Wear OS itself and spread the benefits to the entire ecosystem.