Google to buy Fitbit to expand in wearable tech

Fitbit introduced its own smartwatch in 2017 but it has failed to keep pace with the Apple Watch, which shook up the market after its introduction in 2015.

Google agreed on Friday (November 1) to buy Fitbit for $2.1 billion in a deal giving the US tech giant a fresh entry in the wearable technology space and helping it ramp up its challenge to Apple.

The move comes with the internet search leader seeking to expand further into hardware, and with Fitbit struggling against rivals including Apple.

“We have built a trusted brand that supports more than 28 million active users around the globe who rely on our products to live a healthier, more active life,” Fitbit co-founder and chief executive James Park said in a statement by the two firms announcing the deal.

“Google is an ideal partner to advance our mission.” Rick Osterloh, Google senior vice president for devices and services, said the deal means “bringing together the best hardware, software and AI” to bring more wearables to the marketplace.

“Google aspires to create tools that help people enhance their knowledge, success, health and happiness. This goal is closely aligned with Fitbits long-time focus on wellness and helping people live healthier, more active lives,” Osterloh said in a blog post.

The companies said the Fitbit platform would remain “platform-agnostic” and continue to serve Apple’s iOS devices as well as those powered by the Google Android system.

While Fitbit helped popularize fitness bands and trackers, it has lost ground in recent years to rivals in the wearables market.

A survey by research firm IDC for the second quarter of 2019 found Fitbit in fourth place in a market led by China’s Xiaomi leading the global market, followed by Apple — which makes the leading smartwatch — and Chinese-based Huawei.

Fitbit introduced its own smartwatch in 2017 but it has failed to keep pace with the Apple Watch, which shook up the market after its introduction in 2015.

Google, which faces pressure from regulators around the world over its dominance of internet search, has been boosting its hardware offerings, including a line of Pixel smartphones and tablets, along with connected speakers.

The Alphabet unit is largely absent from wearables gadgetry, following its failed Google Glass project, but produces the WearOS software used by makers of these devices.

The companies said they would take steps to protect user data after the tie-up, and that Fitbit data would not be used for ad targeting by Google.

“Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why,” the company said.

“The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.” Still, analysts pointed out that Google may benefit from the large Fitbit database for health apps and artificial intelligence.

“Google is acquiring customers and data,” said Patrick Moorhead of Moor Insights & Strategy. “I think its a good move given Google has failed so far in wearables and Apple is so far ahead with Watch.” Avi Greengart of the consultancy Techsponential said Google will benefit from Fitbit’s strong brand.

The deal “gets Google market penetration much faster than if it built its own fitness or smartwatch hardware,” Greengart said.

“Google is promising to keep its ad algorithms away from your Fitbit data; this is the right privacy policy, but users will have to trust that it stays that way.”