Why did Google just drop $2.1 Billion to buy Fitbit?

Fitbit is being acquired by Google. After starting more than 12 years ago, the company announced today that it has entered into a definitive agreement to be acquired by Google LLC.

The purchase price is approximately US$2.1 billion. So why would Google drop that kind of money on a company that makes fitness bands and watches?

Ultimately it’s for a combination of the data and the customers. Fitbit has sold more than 100 million devices worldwide and according to Statista, has more than 27 million active users.

Co-founder and CEO of Fitbit, James Park pointed to the acquisition helping to accelerate innovation in the wearable category.

“More than 12 years ago, we set an audacious company vision – to make everyone in the world healthier. 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.”

Google’s efforts in this space, are realised through wearOS, an extension of Android, to wearable products. The announcement from Fitbit tries to reassure users that Fitbit will continue to remain platform-agnostic across both Android and iOS, but it’s safe to expect future Fitbit products (at least the ones with displays) will run on the wearOS platform.

“Fitbit has been a true pioneer in the industry and has created terrific products, experiences and a vibrant community of users.

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.”

Rick Osterloh, Senior Vice President, Devices & Services at Google.

When you first buy (or are gifted) a fitbit device, you sign up for an account with Fitbit, then your data is stored in the cloud and available from any device. One of the great features is being able to share with friends, family and co-workers your fitness achievements, which can help motivate others.

Many of us have lots of data in your Fitbit account and naturally, this acquisition raises the question about that data. Do Google now get access to all your data? Clearly you don’t pay $2.1 Billion for nothing, that data in aggregate is valuable to a company like Google and could definitely help improve wearOS into the future.

Fitbit says consumer trust is paramount and strong privacy and security guidelines have been part of Fitbit’s DNA since day one, and this will not change.

Fitbit went on to say they put users in control of their data and will remain transparent about the data it collects and why. Fitbit have committed ot never use Fitbit health and wellness data for Google ads.

Reading between the lines, that certainly gives Google plenty of scope to leverage the data for future product development, without stomping on your privacy.

Does a company like Google care about you as an individual? No, but seeing trends, across a large userbase like Fitbit’s, certainly has the potential to help them learn, and target future products to address those opportunities.

There’s always a lot of anxiety around acquisitions, but I do think ultimately Google is a good home for Fitbit. Only time will tell if they can help grow the business.

Finally, I think this observation from Ben is fairly poignant, as Fitbit has struggled to maintain its early lead in the fitness tracking space.

More info at Fitbit.

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Jason Cartwright
Jason Cartwrighthttp://techau.com.au/author/jason/
Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis. Disclaimer: Tesla Shareholder from 20/01/2021

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