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Fossil, Misfit and the Future of ‘Smarter Watches’

Fossil's Q "smarter watches" look and feel like a traditional timepiece.Fossil's Q "smarter watches" look and feel like a traditional timepiece.
Fossil's Q "smarter watches" look and feel like a traditional timepiece.Fossil

Last week, accessories and watch maker Fossil announced its acquisition of activity tracker brand Misfit, a $260 million deal that should bolster Fossil’s credibility in the crowded wearables market. The move isn’t terribly surprising, especially given that Fossil has been ramping up its smartwatch ambitions lately with several product announcements, not to mention that Misfit has seen limited success compared with competitors like Fitbit and Jawbone.

While neither brand has made a huge dent in wearable sales—at least compared with devices like the Apple Watch and Fitbit’s various products—this news could hint at certain trends among makers of smartwatches and fitness bands. Namely, consolidation of brands could be key to producing more commercially viable products, and conventionally attractive designs merged with seamless technology might just be the way to win over a reluctant mass market.

On a Fossil (FOSL) conference call back in August, CEO Kosta Kartsotis explained the company’s vision for “smarter watches” as opposed to smartwatches, devices that retain the traditional looks of a wrist-worn timepiece but that feature built-in tech such as sensors for activity tracking.

With the Fossil Q Grant launched last month, we already have a taste of the brand’s approach to smarter watches. The wearable tracks the user’s activity and receives notifications from select contacts, while its classic, round design betrays no hint of the tech under the hood. That’s not to say the company won’t cater to consumers craving more data; the upcoming $275 Fossil Q Founder watch will run Android Wear and utilize the watch face to display updates, notifications and more.

According to Ramon Llamas, research manager of wearables and mobile phones at IDC, this more nuanced approach can only help. “If you look at a lot of smartwatches out there (right now), they represent such a radical change from people’s expectations of what a watch already does. Giving them some building blocks, like notifications or quick bits of information, is easier for a lot of people to digest.”

Of course, Fossil is hardly the first company to take this approach—Swiss brands like Montblanc have felt the heat from the Apple Watch and are responding with their own hybrids of analog and tech features like notifications and activity tracking. But with other smartwatch manufacturers lagging far behind the Apple Watch’s nearly 7 million units shipped since launch, offering compelling designs could be an important way for vendors to attract sales. Plus, with fitness wearables far outpacing smartwatches in sales, adding in activity-tracking functionality could provide a clearer value proposition to consumers already familiar with the benefits of the Fitbit, Misfit Shine and other similar gadgets.

It’s still early days for this category of wearable, as most consumers have yet to be convinced that a smartwatch is a necessary investment. “The death of the traditional watch as we know it has been due to smartphones primarily,” says Llamas. “Now we need to build that bridge back up—we can move bits of data to your wrist, so you don’t always have to look at your phone.”

While it remains to be seen whether smarter watches like those from Fossil can truly compete with Android Wear and the Apple Watch, it’s clear that good looks will play a role in moving units. As Llamas says, “(These devices) have got to look and feel like a watch. A lot of smartwatch vendors have kind of missed the boat on that—sometimes egregiously.”

For more on what’s happening with watches, watch this Fortune video:

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