Will Google’s $2.1B Acquisition of Fitbit Be a Threat to the Apple Watch?

Fitbit Google Apple Watch Credit: Dedi Grigoroiu / Shutterstock
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It’s official: Google has announced that it plans to acquire wearable maker FitBit in a massive $2.1 billion deal. Like past attempts to buy its way into hardware sectors, the move is obviously a step toward Google competing more seriously with the market dominator: the Apple Watch. The big question is whether or not it’ll be successful.

Google’s Acquisition

Google unveiled the deal after a halt in trading Friday morning, after first being hinted at earlier in the week.

In a press release, Google’s Rick Osterloh said that the acquisition is “an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.”

As mentioned earlier, Google’s offer for Fitbit is $7.35 per share. That works out to be around $2.1 billion. And the deal is expected to close following regulatory approval next year.

While Fitbit was one of the early pioneers of the wearables market, the company has been overshadowed by other firms like Apple and Xiaomi.

Fitbit has also been working with insurance companies to offer bundled fitness trackers — but that area has been increasingly squeezed out by Apple.

But combined with Google, the two companies could ostensibly take some of the market share back from the two top dogs. On the other hand, many market analysts see another reason behind the deal: data collection.

Will It Be Successful?

After the deal closes in 2020, there’s a good chance that it won’t be long before we see a so-called “Pixel Watch” hit the market.

Google has long lagged behind on wearables, despite announcing its Android Wear initiative a full year before the Apple Watch was debuted.

Unlike the Google-made wearable endeavor, the Apple Watch has rapidly grown to become one of the most popular wearables on the market. Among smartwatches (or watches in general), the Apple Watch takes the top spot globally.

Trying to unseat such an established player in the market may be a tough ordeal for Google. That’s particularly true when you consider the company’s past hardware failures, like the Pixel tablets.

Fitbit’s strategy, before news of the Google acquisition, was to release lower-priced wearables in an effort to undercut the Apple Watch.

Just take the Versa 2, which retails for $199. Though it’s worth noting that the Apple Watch Series 3, which now also starts at $199, is much more feature-rich than its Fitbit rival. (Fitbit, presently, only holds 10 percent of the global wearables market.)

There are, of course, also privacy concerns with a Google-made wearable. Fitbit hasn’t had the most pro-privacy reputation in the past. And when you combine that with Google’s penchant for data collection, you end up with a product that many privacy-conscious users would probably steer clear of.

In the end, it’s tough to say whether or not Google buying Fitbit will end up being a success story. But it’s much easier to predict that it’s going to have a difficult time creating an Apple Watch killer.

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