Wednesday, December 14, 2016

Google Acquires Cronologics Smartwatch Technology



Google has acquired smartwatch technology startup Cronologics.
Cronologics developed a cross-platform operating system which was the first to feature integration with Amazon's Alexa.
The acquisition was likely mostly about hiring the team rather than the technology.
I expect some of the team's work to show up in the next iteration of Android Wear.

Quick Take

Search advertising giant Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has acquired smartwatch platform startup Cronologics for an undisclosed sum, according to a posting.
The acquisition was likely an "acqui-hire," bringing Cronologics' cross-platform operating system knowledge in-house.
Expect some upgrades and input from the new team to show up in the next iteration of Android Wear.

Target Company

San Mateo, California,-based Cronologics was founded in 2014 by CEO Leor Stern, Lan Roche and John Lagerling.
The company's mission was to develop a new, cross-platform smartwatch OS (Operating System) that would integrate with a variety of existing platforms such as Android, Apple iOS (NASDAQ:AAPL) and Amazon's (NASDAQ:AMZN) Alexa system.
To-date, Cronologics had been able to include its Alexa-compatible technology in iMCO Technology's CoWatch, which was called the 'first smartwatch to use Amazon's Alexa voice recognition."
There were no known external or institutional investors in the company. The founders were all ex-Google business development employees.

Acquisition Terms and Rationale

The two companies did not disclose the consideration for the deal.
It is likely Google paid under $10 million for the acquisition due to its very early stage of development.
According to the team at Cronologics, they saw "strong alignment with Android Wear's continue pushing the frontier of wearable technology and smartwatches with Android Wear 2.0 and beyond."
The deal has the earmarks of a typical "acqui-hire." Google likely saw a talented team with some compelling ideas that it could use to move its wearable technology initiatives forward.


Google, along with smartwatch makers Apple, Samsung (OTC:SSNLF), Fitbit (NYSE:FIT), Garmin (NASDAQ:GRMN) and others, has made admirable attempts to develop a smartwatch platform that intrigues consumers.
However, like the others, Google has largely failed to make a system compelling enough to be category-defining.
With the acqui-hire of Cronologics, Google is getting another perspective on the smartwatch segment and bringing cross-platform experience in-house.
I believe the major smartwatch players view the smartwatch as the first interface into wearable computing, and as such, are investing in obtaining market knowledge as they attempt to continue product development, miniaturization and new materials.
Cronologics' competency was in operating systems and interfaces, two important elements in the nascent wearables industry.
Holding a smartphone in your hand is a different proposition than "wearing" a device on your body and consumer expectations are still being figured out.
I don't expect major breakthroughs from the acquisition because I believe that wearables will become important when the hardware becomes lighter and form fitting, like Apple's soon-to-ship AirPods.
Rather, expect the next iteration of Android Wear 3.0 to contain some input and technology from the new incoming team as Google makes incremental improvements to the platform's capabilities.
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