Google buying FitBit for $2.1 billion to advance fight against Apple Watch
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
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.
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.
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.
Comments
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.
https://www.fitbit.com/legal/privacy-policy
https://policies.google.com/privacy?hl=en-US
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.