GOOGLE ACQUIRES FITBIT FOR USD 2.1 BILLION

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Google parent company Alphabet will buy Fitbit, putting the tech giant head-to-head with Apple in the fitness tracking and consumer health space. The deal values Fitbit around USD 2.1 billion at a fully diluted equity value.The acquisition makes a lot of sense as Google has spent years trying to break into the wearables market with its Wear OS platform, but it has struggled to make a real impact. Fitbit is offering Google an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.

The move comes after Google announced a deal to buy USD 40 million worth of Fossil’s smartwatch technology in January. Fossil was already one of the primary brands building smartwatches on Google’s Wear OS. In addition, Fitbit’s hardware is giving Google a solid foundation to build on for future Android-integrated wearables devices. And the company’s strong focus on fitness tracking could naturally be integrated into Google’s existing Google Fit apps, too, offering Google a solid alternative to the Apple Watch’s deep fitness tracking integration with the iPhone.

Connecting devices are the next innovation in the ongoing movement towards a holistic and digitised health system. They are meant to integrate seamlessly with the users’ daily life and making data collection convenient, automatic and seamless. The Internet of Things has shifted the concept of self-measurement to that of self-monitoring and, to that of self-management, writes the Deloitte Center for Health Solutions. The Quantified Self, also known as lifelogging, which means incorporating technology into the data acquisition around a person's daily life, such as tracking food consumption, mental states and performance, attracts more and more people.

While Google has also invested in a lot of its own in-house development, buying Fitbit represents a step-change and a bolt-on of years of effort focused specifically on the wearables category. Wearables is still a young market, in which industry Apple has seen its strongest category growth through its Apple Watch. Google device SVP Rick Osterloh wrote in his blog post announcing the deal that “Fitbit has been a true pioneer in the industry and has created engaging products, experiences and a vibrant community of users. 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.”