Google’s Fitbit acquisition: hardware expansion, privacy, and all about the deal

By Xite - November 4, 2019
Google has acquired US-based wearable maker Fitbit for $2.1 billion. With this acquisition, the search engine giant looks determined to expand its hardware business that is still relatively young. Goo....

Rumours were realised when Google finally bought Fitbit for $2.1 billion. The move attested the gossip that Google was seriously considering the expansion of its hardware business. As a part of the deal, the search engine giant will fully own the US-based fitness wearable maker. The development comes a few days after initial reports suggested that the Sundar Pichai-led company is planning to foray into the wearable market. Google has been trying hard to be on a par with its competitors that are making inroads in the hardware space, however, it hasn’t seen much success so far.

‘Over the years, Google has made progress with partners in this space with Wear OS and Google Fit, but we see an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market. 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,’ Rick Osterloh, Senior Vice President, Devices & Services, said in a blog post.

Fitbit Intext

What’s interesting is that Google knows that its hardware business is new, and it seems it has plans to expand further in future. Osterloh says that Google’s hardware business is ‘still relatively young,’ but the company is satisfied with the ‘strong foundation of capabilities and products’, which include, among others, the Pixel smartphones and Pixelbooks, and Nest family of devices for the home. Google says that it plans to work closely with Fitbit to combine its respective smartwatch and fitness tracker platforms.

Meanwhile, Fitbit has said that the transaction is expected to close in 2020, subject to customary closing conditions. The conditions include approval by Fitbit’s stockholders and other regulatory approvals. The company reiterated that it follows strong privacy and security guidelines. ‘Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why. The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads,’ it said in a statement.

As per the wearable-maker, it supports more than 28 million active users around the globe and sold over 100 million devices. Fitbit says it will continue to remain platform-agnostic and will run on both Android and iOS. With this acquisition, Google would expand its R&D in the wearable space. In January, it acquired American watch-maker Fossil Group’s intellectual property (IP) related to smartwatch for $40 million. As part of the transaction, a portion of Fossil Group’s research and development (R&D) team, currently supporting the transferring IP, joined Google.

Q2 Wearable Market

Apple has been the top smartwatch seller for a few years now, but Xiaomi has led the overall shipments of wrist-worn wearables, which include smartwatches, basic watches, and wristbands. According to International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker, the total shipments in the second quarter of 2019 reached 34.2 million units, which is up 28.8 per cent year-over-year. The top 5 companies – Xiaomi, Apple, Huawei, Fitbit, and Samsung – collectively captured 65.7 per cent of the market.

With Fossil Group’s intellectual property (IP) related to smartwatch and Fitbit’s activity trackers, Google is planning to go with full steam to capture a sizeable share of the wearable space. It is expected that Google may launch a smartwatch and a standalone fitness tracker in the future.

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  • Google
  • Fitbit
  • Fossil
  • Apple