Even though it is exploring its options, the company hasn’t yet decided if it will pursue a sale.
What you need to know
- Wearable maker Fitbit is reportedly exploring the possibility of a sale.
- Investment bank Qatalyst Partners has suggested Google parent company Alphabet may be interested in acquiring the wearable maker.
- According to data released by the International Data Corporation (IDC) recently, Fitbit was the world’s fourth largest wearables vendor during Q2 2019.
Fitbit announced the Versa 2 smartwatch last month, featuring Alexa integration and slightly upgraded battery life. Less than a month later, a report from Reuters claims the company is exploring the possibility of a sale with investment bank Qatalyst Partners.
As per the report, Qatalyst has been trying to get the wearable maker to consider a sale for several weeks. The investment bank has reportedly suggested the company could attract acquisition interest from Google parent company Alphabet as well as a few private equity firms.
While Google is yet to enter the wearables market itself, the company paid Fossil $40 million earlier this year to purchase intellectual property related to a revolutionary smartwatch technology. Google had considered launching a Pixel-branded smartwatch back in 2016 but decided to axe the idea as it felt the watches didn’t fit well with the Pixel “family of products.”
According to the latest worldwide quarterly wearable device tracker from the International Data Corporation (IDC), Fitbit was the fourth largest wearable vendor in the second quarter of 2019. The market pioneer saw its business decline significantly, mainly due to the lack of consumer interest in the Versa Lite.
Fitbit reported revenue of $314 million for the second quarter of 2019, a slight increase over the $299.3 billion revenue it reported during the same period last year. The company has forecasted an increased in device shipments in 2019 but expects the average selling price to decrease year-over-year, which could result in $50 million lower revenue this year.
Fitbit Versa 2
From $200 at Fitbit
Fitbit’s new Versa 2 is a health and fitness-focused smartwatch that comes with Alexa built-in, offers continuous heart rate tracking and promises up to 5+ days battery. The smartwatch also features a light aluminum case, bright touchscreen display with Corning Gorilla Glass 3 protection, customizable clock faces, 15+ exercise modes, and 5 ATM water resistance.