The rumors are true. A week after word surfaced that Google planned to buy Fitbit, the companies have confirmed the purchase in a blog post authored by Google device SVP, Rick Osterloh. The match could ultimately prove beneficial for both parties. Google has struggled to make much of a dent in the wearables category, leading the software giant to purchase a large chunk of IP from watchmaker, Fossil for $40 million.
Fitbit, meanwhile, has had issues maintaining growth in recent years. The company, which first pioneered and then dominated the wrist-worn tracker space, struggled as smartwatches grew and ultimately dominated the space. While late to the category, the company has had luck with the Versa watch, the result of its own acquisition of Pebble, Vector and Coin, while working to pivot much of its focus into healthcare.
Fitbit confirmed that the $7.35 per share deal values the wearable pioneer at around $2.1 billion. The company’s price has fluctuated significantly as it worked to adjust to a changing market. In summer 2015, it hit an all-time high of $51.90.
“More than 12 years ago, we set an audacious company vision – to make everyone in the world healthier,” CEO James Park said in a statement. “Today, I’m incredibly proud of what we’ve achieved towards reaching that goal. 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. Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone. I could not be more excited for what lies ahead.”
Osterloh added, “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.”
Following the disappointing performance of the stripped down Versa Lite smartwatch, Fitbit announced a premium service earlier this year, set to offer users more insights into the information its products collect. Fitbit has also worked to be recognized as a serious health product, in the wake of the Apple Watch’s successes. The company has announced several partnerships with health care companies.
Sensing inevitable concern around Google’s upcoming access to a bevy of health data, Osterloh looked to temper criticism with reassurance that it will not be using the information for advertising. “We will never sell personal information to anyone,” the executive wrote. “Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data.”
No immediate word on how the deal will impact either company, but Google’s Nest acquisition is any indication, the acquisition could be a gradual one, as Fitbit continues to release products in its pipeline. Fitbit notably partnered with Amazon to bring Alexa to the recently released Versa 2 — a first for a wearable. With Google in charge of one of Alexa’s chief competitors, however, one expects future versions of the device will ship with Assistant on-board.
Beyond that, the arrival of Fitbit’s IP, coupled with Fossil could finally be the shot to the arm Wear OS needs. One need look no further than Google’s acquisition of a chunk of HTC’s mobile division to build out its Pixel devices as an example of how the deal could ultimately shape its hardware, moving forward. The arrival of a Pixel Watch seems inevitable, as Google looks to build a Wear OS division as robust as its home and mobile offerings.
Notably, all have been as much the result of acquisitions (Nest and HTC, respectively) as organic, in-house growth.
The deal is expected to close at some point next year, pending the standard regulatory and stockholder approval.