Alphabet Inc (NASDAQ:GOOGL) acquired Fitbit for $2.1 billion to fulfill its ambition of ambient computing. With this takeover, the search giant would bring together hardware, software and AI to develop innovative wearables. Google will also get a technical edge to compete with Apple’s Watch. The deal also helps Google to penetrate the healthcare market.
What is special about Fitbit?
Fitbit is well known worldwide because of its software – social network, subscription coaching, sleep tracking, and mobile app. It stands tall in the fiercely competitive wearable segment. It also makes hardware. However, its dominance in the wearable market declined over the past three years.
Fitbit leads the innovation in wrist dongles (with WiFi connectivity), and Bluetooth. The company played a vital role in making battery-operated wearables with effective and better displays to cause an eye feast every year. The company rolled out the first tracker way back in the year 2009. The Jawbone Up, which is plugged into the headphone jack of a phone to sync with the wrist band’s data.
Rick Osterloh, Senior Vice President (Devices and Services) of Google said the takeover of Fitbit is an opportunity to pump in more funds into the wearable OS and introduce Google manufactured wearable devices in the market.
Just like Nest, Fitbit would be merged with Google following the acquisition. After the takeover by Google, Fitbit would continue to focus on maintaining the privacy of fitness and health data. The wellness and health data collected by Fitbit would not be used in the ads of Google.
Google has been struggling to make an impact in the wearable market for several years. The acquisition of Fitbit offers an edge to Google to develop wearable devices integrated into Android to focus on future growth. On the other hand, Fitbit could make its smartwatches such as the Versa smarter.
Tech giants make headway in health trackers
Tech giants like Huawei, Xiaomi, and Apple are making strides in health trackers. They hold a lion share in the health care segment in Q2 2019 while leaving the small players struggling. With Google’s entry into the healthcare and wearable market, the tech firms expect to become central repositories for the health status in our daily lives.