A few minutes ago, it was announced that Google had bought struggling wearables maker Fitbit for $2.1 billion.
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
— Google (@Google) November 1, 2019
Now this is great for Fitbit because they were bleeding cash like a drive by shooting victim in Compton CA. So it is clear why they would agree to be bought by Google. But why would Google buy them? I see a couple of reasons:
- Google wants the data that Fitbit has: Fitbit was first to the wearables market and has a pile of data that Google would be very, VERY interested in. A lot of that data was acquired via deals with insurance companies to bundle Fitbit products in with customer health offerings. That’s something that Google can easily monetize.
- Google needs help with Android Wear: Let’s face it, Android Wear is an afterthought. If you want proof of that, just go to any shopping mall or subway station and count the number of people wearing Apple Watches. Then count the number of Samsung wearables. Followed by the number of Fitbit products and finally Android Wear products. I suspect that you’ll see that Apple Watches will dominate what you see by a country mile, followed by Fitbit products. Samsung products may pop up now and again, and you MAY see a Google product. But likely not. If Google wants to make Android Wear a player in the wearables space, they need Fitbit to do it as clearly if Google could have done this in house, they would have done it already. Thus buying Fitbit makes sense as their expertise could help them immeasurably.
I am going to go out on a limb guess that a bunch of execs at 1 Apple Park are sending emails to their staff as we speak as they may actually have to deal with competition in the wearables market for the first time.
This should be fun.