Google buying FitBit for $2.1 billion to advance fight against Apple Watch

Posted:
in General Discussion edited November 2019
Google has announced that a deal is in place for it to buy FitBit, in a share purchase deal worth $2.1 billion.

Certain Fitbit devices have companion iOS apps
Certain Fitbit devices have companion iOS apps


The deal was announced following a halt in trading the shares on early Friday morning. The deal was said to be floated on Tuesday, following a period of back-and-forth discussions between Alphabet and Fitbit.

"Fitbit has been a true pioneer in the industry and has created engaging products, experiences and a vibrant community of users," Google's Rick Osterloh said in a statement. "By working closely with Fitbit's team of experts, and bringing together the best AI, software and hardware, we can help spur innovation in wearables and build products to benefit even more people around the world.

Fitbit cut its revenue forecast for the year in July, lighting the latest round of conversation about the financial stability of the company. At the time, it cited poor sales of the Versa Lite in the face of unnamed competition -- likely the Apple Watch.

Multiple analysts say that Fitbit's value has more to do with user data collection, more than hardware. The company has been making deals with insurance companies to bundle the product in with customer health offerings, and is trying to expand its revenue in a crowded low-end fitness tracking market, increasingly squeezed by the Apple Watch.

We've signed an agreement to acquire @Fitbit. Together, we aim to spur innovation in wearables and build helpful products to benefit more people around the world. https://t.co/HSfQVWnHJB

-- BGLE (@Google)


In August, the company launched the Versa 2. The device brings functionality closer to that of the Apple Watch, with it adding Alexa, near-field communication for online payments, and storage for music and user media on-device.

The Versa 2 retails for $199. The Apple Watch Series 5 starts at $399, but the Apple Watch Series 3 sells for $199 -- and is more full-featured than the Versa 2 for Apple owners.

Over time, Fitbit has tried to focus on cheaper product versus the Apple Watch. In 2015, the Fitbit Surge added more features like GPS to try to fight the Apple Watch, with some success. Similarly, in 2017, Apple continued to widen the wearable technology gap with a more flexible system versus the Fitbit Ionic.

Fitbit's quarterly earnings will be announced on November 6.

Google's offer is for $7.35 per share in cash. The deal is expected to close following regulatory approval in 2020.



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Comments

  • Reply 1 of 52
    MacProMacPro Posts: 19,471member
    Haha!  Good luck with that.
    ajljwdawsomrmacgeekolsSpamSandwichcornchipwatto_cobrajbdragon
  • Reply 2 of 52
    Google on your wrist......hmmmmmmmmmm?
    watto_cobra
  • Reply 3 of 52
    hmurchisonhmurchison Posts: 12,351member
    Feel sorry for Fitbit owners.   Googles about to screw up your platform. 
    razorpitjwdawsomrmacgeekolsSpamSandwichllamagilly33tmayGG1JWSC
  • Reply 4 of 52
    wood1208wood1208 Posts: 2,694member
    If past is any indication! "Google is selling Motorola, the iconic handset maker it bought for $12.5 billion in May of 2012, to Chinese PC maker Lenovo for $2.91 billion". Fitbit should have merged with Garmin's wearables division.
    edited November 2019 DoomFreakjwdawsoJWSCwatto_cobra
  • Reply 5 of 52
    gatorguygatorguy Posts: 23,363member
    wood1208 said:
    If past is any indication! "Google is selling Motorola, the iconic handset maker it bought for $12.5 billion in May of 2012, to Chinese PC maker Lenovo for $2.91 billion". Fitbit should have merged with Garmin's wearables division.
    You might be on the money when all the dust settles. Or maybe not. I'd give it 12 months to see where this is going.

    Google bought "something" from Fossil several months back, will now own stuff from Pebble and Fitstar and Twine along with Fitbit IP. I doubt they're trying to create an Apple Watch competitor (why would they? Apple owns the segment)) but have signaled an interest in health-related wearables so perhaps that's what purpose Fitbit fills.

    It's been hardly mentioned that Google's ATAP created a health-monitor "band" briefly revealed in Milan last year following a health related "watch" a fee years earlier. It's not a new interest. Google even has Apple's own Chairman of the Board leading one of it's health-specific companies. Overall health, disease treatment and prevention, even research into extending human life well beyond 120 years have all been a major focus of Google (alphabet) for a number of years. 
    edited November 2019
  • Reply 6 of 52
    What is going to happen with the years upon years of customer data Fitbit has? 
    razorpitolswatto_cobrajbdragonchasm
  • Reply 7 of 52
    FolioFolio Posts: 698member
    Pixel and Versa. Two misfits combine for a hit? Doubt it.
    olswatto_cobra
  • Reply 8 of 52
    dewmedewme Posts: 4,178member
    This makes sense for Google in terms of customer data acquisition, analytics, and targeted advertising/marketing. With just a little snooping from the onboard sensors Google will be able to push highly targeted ads to your wrist for a plethora of products including heart medications, sleep aids, sun screen, fitness equipment, blood pressure medications, gym memberships, etc. If Google could figure out a way to push advertising into your dreams they would have already done it. 
    edited November 2019 cornchiplostkiwiwatto_cobrajbdragon
  • Reply 9 of 52
    xbitxbit Posts: 340member
    That seems like a lot of money for a struggling company. 
    Wgkruegeragilealtitudecornchipwatto_cobra
  • Reply 10 of 52
    lkrupplkrupp Posts: 9,989member
    And none of this will trigger charges of anti-trust or  lack of customer choice. Imagine, though, the gnashing of teeth if Apple had tried to buy FitBit.
    pujones1hmurchisonolsGG1lostkiwiwatto_cobra
  • Reply 11 of 52
    razorpitrazorpit Posts: 1,796member
    wood1208 said:
    If past is any indication! "Google is selling Motorola, the iconic handset maker it bought for $12.5 billion in May of 2012, to Chinese PC maker Lenovo for $2.91 billion". Fitbit should have merged with Garmin's wearables division.
    Immediately thought the same thing. Wonder who the lucky suitor will be in ~ 2022?
    jwdawsocornchipwatto_cobrajbdragon
  • Reply 12 of 52
    gatorguygatorguy Posts: 23,363member
    What is going to happen with the years upon years of customer data Fitbit has? 
    It doesn't look like much if anything will really change on that front other than the name on the header and the security of the data itself which should be stouter. Read both privacy policies.
    https://www.fitbit.com/legal/privacy-policy
    https://policies.google.com/privacy?hl=en-US



  • Reply 13 of 52
    gatorguygatorguy Posts: 23,363member
    dewme said:
    This makes sense for Google in terms of customer data acquisition, analytics, and targeted advertising/marketing. With just a little snooping from the onboard sensors Google will be able to push highly targeted ads to your wrist for a plethora of products including heart medications, sleep aids, sun screen, fitness equipment, blood pressure medications, gym memberships, etc. If Google could figure out a way to push advertising into your dreams they would have already done it. 
    "We (Google) prohibit advertisers from selecting an audience based on sensitive information, such as health information or religious beliefs."
    JWSC
  • Reply 14 of 52
    wood1208wood1208 Posts: 2,694member
    dewme said:
    This makes sense for Google in terms of customer data acquisition, analytics, and targeted advertising/marketing. With just a little snooping from the onboard sensors Google will be able to push highly targeted ads to your wrist for a plethora of products including heart medications, sleep aids, sun screen, fitness equipment, blood pressure medications, gym memberships, etc. If Google could figure out a way to push advertising into your dreams they would have already done it. 
    Only reason buying fitbit is "Data acquisition". Google is trying for long time to take foot hold in Health field and fitbit is another tool to help. At the end of day, Google is data collection, analyses and sell adv to make living.
    tmaywatto_cobrajbdragon
  • Reply 15 of 52
    sdw2001sdw2001 Posts: 17,847member
    Another product/platform that Google will ruin.  It's done a great job taking the best video site ever created and turning it into an advertisement and voter manipulation machine.  
    jwdawsohmurchisonrazorpitredraider11llamalostkiwiwatto_cobrajbdragon
  • Reply 16 of 52
    How long....

    Before Google closes down FitBit because it can't make the money they expect?
    I really feel sorry for existing FitBit users.
    All your data will now belongs (or when the deal closes) to Google for them to do with it as they see fit.
    jwdawsorazorpitlostkiwiwatto_cobrajbdragon
  • Reply 17 of 52
    FolioFolio Posts: 698member
    Compared to what google pays in TAC each year, this one time $2B charge is a blip. I suppose it might be strategic attempt to spur defections from Android and might mesh w Google's existing health research. Any thoughts @gatorguy?
    cornchipwatto_cobra
  • Reply 18 of 52
    gatorguygatorguy Posts: 23,363member
    sdw2001 said:
    Another product/platform that Google will ruin.  It's done a great job taking the best video site ever created and turning it into an advertisement and voter manipulation machine.  
    To be fair it's a much more massive and useful service than it was 13 years ago when Google purchased it. 
  • Reply 19 of 52
    dewmedewme Posts: 4,178member
    lkrupp said:
    And none of this will trigger charges of anti-trust or  lack of customer choice. Imagine, though, the gnashing of teeth if Apple had tried to buy FitBit.
    If Apple had bought FitBit they would be buying market share in a market they already dominate, which would definitely raise some eyebrows. FitBit selling out to Google simply changes ownership of the company.

    But yeah, on a macro scale the absolute dominance of so many markets by a relatively small handful of companies is something to keep an eye on. For Google the FitBit acquisition is probably a move to gain additional touch points for the proliferation of their core business, i.e., advertising, than it is a desire to get into the wearables market to serve a broader range of customer needs. It's really more about addition another layer of telemetry and instrumentation to their product line: which Google publicly identifies with the "customer" moniker, but whom are in fact more accurately defined as "Ad Sinks," the components needed to complete the circuit for the "Ad Sources" who are Google's real customers. Yeah, "customer" sounds much nicer than "ad sink" but with Google they are one and the same.
    muthuk_vanalingamwatto_cobra
  • Reply 20 of 52
    dewmedewme Posts: 4,178member
    gatorguy said:
    dewme said:
    This makes sense for Google in terms of customer data acquisition, analytics, and targeted advertising/marketing. With just a little snooping from the onboard sensors Google will be able to push highly targeted ads to your wrist for a plethora of products including heart medications, sleep aids, sun screen, fitness equipment, blood pressure medications, gym memberships, etc. If Google could figure out a way to push advertising into your dreams they would have already done it. 
    "We (Google) prohibit advertisers from selecting an audience based on sensitive information, such as health information or religious beliefs."
    That's funny. 
    razorpitcornchipwatto_cobra
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