The rumors surfaced a few days ago, and it turns out they were true: Google is buying Fitbit for $2.1 billion in cash. The two companies just announced the deal today.
Fitbit will be folded into Google, and that means it will be making a fresh generation of wearables that will run Wear OS and be branded as Made By Google devices.
“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,” said Rick Osterloh, Google’s senior vice president of devices and services, in a blog post announcing the deal. “Fitbit has been a true pioneer in the industry and has created engaging products, experiences, and a vibrant community of users. ”
When we first heard the search giant might be sizing up the fitness wearable brand, we wondered why would Google buy Fitbit? This is a clear signal that Google is serious about getting into the wearable market on the hardware side and pushing its Wear OS software onto more devices.
Concerns were immediately raised by some about the privacy of personal data and what might happen to Fitbit users’ data if the deal was to go ahead. Osterloh was quick to address that issue, promising that, “Similar to our other products, with wearables, we will be transparent about the data we collect and why. We will never sell personal information to anyone. 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.”
Considering that Fitbit has been struggling to transition from fitness trackers to smartwatches, which is the sector of wearables that’s actually growing, the fact it is open to acquisition isn’t a surprise, but it does look as though Google has paid above market value. Fitbit’s market cap is around $1.6 billion, so paying $2.1 billion shows its determination to get the deal done.
“More than 12 years ago, we set an audacious company vision — to make everyone in the world healthier,” said James Park, co-founder and CEO of Fitbit, in a statement. “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 also paid $40 million earlier this year for some unspecified smartwatch technology from Fossil, so wearables are obviously an area where it would like to do better. Wear OS has had limited success, and with none of the top five smartwatch makers using Google’s platform, it may need a rethink. Whether this acquisition means Google will put out fitness trackers as well as smartwatches remains to be seen, but what’s clear is that Google wants to expand beyond software and put out some wearable devices of its own.