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Money News

How Google is Getting Fit

November 04, 2019
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1 min read

Alphabet, the parent of Google, announced it will buy the fitness and wearable device company Fitbit in a deal valued at $2.1 billion.

Google has an ever-growing array of hardware devices, including phones, computers, and smartwatches, and expanding into health and fitness wearable technology could fill a gap in Google’s lineup, according to reports.

Specifically, Google may want to compete with Apple, which owns nearly half of the smartwatch market with its Apple Watch, which has extensive workout and activity tracking capabilities.

Google has purchased more than 200 companies, including Nest Labs, Waze, and Youtube over the past 15 years, according to reports.

What are wearables?

Wearables are any clothing or accessory that can contain sensors, cameras, computer chips, and other technology, as well as the software used to collect data and information about a person and his surroundings, such as vital signs, including heart rate, breathing, and pulse.

Wearable items include watches, wristbands, ear accessories, glasses and other kinds of clothing.

The wearables market has experienced double-digit growth in recent years, with the total number of wearable devices sold in 2018 increasing 28% to 172 million devices compared to 2017, according to recent research. Sales are expected to increase a further 16% in 2019 to 199 million devices.

Apple is considered the market leader in wearables, owning nearly half of the smartwatch market, according to research.

Apple noted in its most recent earnings report that sales for its own wearable products, including the Apple Watch and AirPods, are up 54% in the third quarter of 2019, compared to the third quarter of 2018, and will soon overtake sales of both the iPad and the Mac.

In addition to Apple and Fitbit, Samsung also creates wearable products, including smartwatches and fitness trackers.

Regulatory challenges

Google’s acquisition of Fitbit may attract scrutiny from federal regulators who are looking at whether Google uses consumer data and its advertising in potentially anti-competitive ways, according to Bloomberg.

By purchasing Fitbit, Google could also get access to 27 million of its customers. Fitbit, in a press release, assured its customers that it would not give their data to Google for advertising purposes.

More about Fitbit

Fitbit was founded in 2008 by James Park and Eric Friedman. In addition to its fitness tracking bands, it also creates a line of smartwatches.

The company went public in 2015, and it has sold more than 100 million devices.

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By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

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