Google (NASDAQ: GOOGL) is getting into the fitness wearables business. The technology giant announced last week that it is buying Fitbit (NYSE: FIT) at $7.35 per share in an all-cash worth approximately $2.1 billion. The deal is expected to close next year, subject to regulatory approval, approval by Fitbit stockholders and standard closing conditions.
Fitbit has been a true pioneer in the industry and has created terrific products, experiences and a vibrant community of users, said Rick Osterloh, Senior Vice President, Devices & Services at Google in a November 1 announcement. We’re looking forward to working with the incredible talent at Fitbit, and bringing together the best hardware, software and AI, to build wearables to help even more people around the world.
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Founded in 2007 by James Park and Eric Friedman, the San Francisco-based Fitbit designs products and experiences to help people live healthier, more active lives. Through apps and fitness trackers, Fitbit customers can track their progress, get inspiration and guidance to their health and fitness goals. The company now has a wide range of modern fitness devices including:
- Activity trackers: Fitbit Charge 3, Fitbit Inspire HR, Fitbit Inspire and Fitbit Ace 2
- Smartwatches: Fitbit Ionic and Fitbit Versa
- Wireless headphones: Fitbit Flyer
- Smart scale: Fitbit Aria
Fitbit products are available for both iOS and Android and can be purchased in approximately 39,000 retail stores and in 100+ countries around the world. They are also sold online. In addition to devices, Fitbit offers a subscription program – Fitbit Premium with guided programs, advanced data insights and sleep tools, dynamic workouts and more. The subscriber sets their fitness level, goals and schedule, and Premium creates customized programs to help the subscriber reach their goals.
More than 12 years ago, we set an audacious company vision – to make everyone in the world healthier. Today, Im incredibly proud of what weve 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, said Park, Fitbit co-founder and CEO. Google is an ideal partner to advance our mission. With Googles 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.
In its announcement, Fitbit reiterated its commitment to data privacy and said this wont change under new ownership. This promise may still face scrutiny by regulators about data privacy.
Fitbit will continue to put users in control of their data and will remain transparent about the data it collections and why, said Fitbit. The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.
The Motley Fool said Googles acquisition of Fitbit is all about Apple, the market leader for the sale of smartwatches with the Apple Watch, which was first released in 2015. According to data from Canalys, Apple Watch led the market with a 37.9% share, or 2.9 million Apple Watches shipped in the U.S. and Canada, in the second quarter of 2019. Fitbit came in at second place at 24.1%. Samsung was third at 10.6%.
Technology behemoths like Google and Apple make it hard for companies like Fitbit to compete. Fitbits agreement to be acquired by Google gives the wearables maker a good shot at sustainable success. What remains to be seen is whether Google will take over Fitbit, or if Fitbit will be allowed to run independently. The latter would certainly make regulators more comfortable and the deal more palatable to Fitbits founders and leadership.