It looks like Google is getting ready to head into the wearables business. Both Reuters and CNBC are reporting that Google-owned subsidiary Alphabet has bid to buy Fitbit, a maker of smart bracelets and watches.
According to Reuters, which initially published the news, negotiations are not over yet – and it is still unclear how much Alphabet is willing to pay. That said, CNBC reported that Fitbit’s shares grew 27% after trading was announced, reaching a market value of $ 1.4 billion.
The news is no surprise if you are paying attention to the market of physical activity wristbands and smartwatches. Although Fitbit does very well in the United States with its bracelets – so the term Fitbit has become almost synonymous with the category – the company doesn’t do so well with smartwatches. The company paid Pebble money at the end of 2016, but Ionic, its first smartwatch, was a little lackluster. And while Fitbit was most successful with its second smartwatch, the Versa, Reuters reported last month that Fitbit was considering a sale after a 2019 revenue forecast cut, partly due to disappointing Versa Lite Edition sales.
Meanwhile, Google has been quietly expanding its “capital” in the smartwatch business. Earlier this year, the company bought Fossil’s technology division for $ 40 million, as well as part of its development and research team.
Before this month’s Made by Google event, there were many rumors that Google would finally release the long-awaited Pixel Watch. In the end, that didn’t happen, but Google made a lot of noise about “environmental computing” – the idea that you should access Google services wherever you are – at the event itself. A smartwatch fits those ambitions perfectly.
At this point, however, Google lags far behind competitors such as Apple and Samsung in smartwatch software. Despite many improvements in the past and Qualcomm finally upgrading the Snapdragon Wear 3100 chip, Wear OS is still not great. It’s not like Fitbit OS is so robust, but Fitbit has something Google wants: lots and lots of fitness data.
Of course, Apple has a lot of data thanks to Apple Watch – and it will get more from Apple’s upcoming health studies – but Fitbit has been in the game for a long time. Besides, by the end of 2018, the company had 27.6 million active users.
On top of a loyal user base, there is also plenty of data covering demographic information, health metrics such as heart rate and sleep data, and more sensitive information, such as when a woman last menstruated or her last sexual encounter. Apart from the fact that Fitbit has recently added voice assistant features via Alexa in Versa 2, it’s not hard to imagine switching to Google Assistant.
While there have been reports that Pixel Watch may turn out to be an analog-hybrid, it could be easier for Google to develop with Fitbit and Pebble technology than to build one from scratch on a platform that no one seems to love ( Sorry, Wear OS, but it’s the reality).
We’ll have to wait and see how all this happens, but if Alphabet buys Fitbit, Pixel Watch might look a little more familiar than originally thought.