Google to buy Fitbit for $2.1 billion

The deal represents an aggressive attempt by Google to bolster its lineup of hardware products.

In a statement Fitbit said Google was paying $7.35 per share in cash, or about $2.1 billion.

Google said on that it was buying Fitbit, the maker of fitness-tracking devices, in a $2.1 billion deal that closes the gap with Apple in the growing market for wearable electronics. But the deal raises concerns that the internet company is gaining private health information about its users.

The acquisition is likely to face regulatory scrutiny from agencies already investigating Google for antitrust concerns, because Fitbit collects sensitive information from users through the device. In an effort to head off that potentially thorny point, Google said it would not use health data gleaned from Fitbit devices in its core advertising business.

You will always be in control of your data, and we will remain transparent about the data we collect and why,” Fitbit’s chief executive, James Park, said in an email to his company’s customers on morning. “We never sell your personal information, and Fitbit health and wellness data will not be used for Google ads.”

The planned sale of the 12-year-old Fitbit to Google is a reminder of how difficult it can be for a smaller device maker to thrive as larger companies start competing for the same customers. Over the last 10 years, innovative start-ups like Nest, Beats, Dropcam and Flip have all been acquired by Silicon Valley’s biggest companies.

Fitbit pioneered wearable technology before the emergence of so-called smartwatches, which can send messages and take calls as well as keep track of athletic activity. The company, which is based in San Francisco, had long enjoyed brand recognition that matched its bigger competitors, thanks in part to catchy, aspirational advertising.

Fitbit’s wrist devices celebrated — with a light buzz and a flashing display — what some fitness experts thought was an arbitrary if laudable goal: walking or running 10,000 steps.

But over the past few years, far bigger tech companies have expanded aggressively into health products and services. Financial analysts wondered how long Fitbit could survive after Apple started selling its own wearable device, the Apple Watch, in 2015. Since then, Apple has been adding new health features to its Apple Watch, like a heart monitor app, making it a direct competitor to Fitbit.

Fitbit has made its devices more sophisticated to compete with Apple in recent years, essentially offering many of the same smartwatch capabilities as the Apple Watch. But it has not been able to keep pace with the tech giant.

The Apple Watch now the market for wearable devices, with nearly a 38 percent share in the second quarter, according to data from the tech analysis firm Canalys. Fitbit had the second-highest share with 24.1 percent.

Source: https://www.nytimes.com/

Related presentations

Liked this post?

Share it on your social networks