INSUBCONTINENT EXCLUSIVE:
Image copyrightSmith Collection/GadoFitness device marker Fitbit is being bought by Google for $2.1bn (£1.6bn).The move allows Google to
expand into the market for fitness trackers and smart watches
It comes at a time when loss-making Fitbit has been looking to expand into other areas
"Google is an ideal partner to advance our mission," said James Park, co-founder and chief executive of Fitbit.The bid values Fitbit at
$7.35 a share, a premium of about 19% to the stock's closing price on Thursday."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," said Mr Park, who
founded Fitbit 12 years ago.The company, one of the first sellers of tech-enabled fitness trackers, was valued at more than $4bn at the time
It has sold more than 100 million devices, but has struggled with waning demand for its products as other companies enter the market
It put itself up for sale last month.Its shares have jumped 40% since Monday, when Reuters reported the interest from Google.Image
copyrightGetty ImagesImage caption
James Park founded Fitbit 12 years ago
The transaction is expected to
be completed in 2020, pending approval by the board and regulators.Regulators in the US and abroad have been taking a closer look at
acquisitions by the tech giants, amid growing concerns about monopoly power.Fitbit said its "health and wellness" data would not be used for
Google adverts and pledged to maintain strong privacy protections.But analysts said the health data was key the deal."The deep health and
fitness data, coupled with the 28 million active users on the Fitbit platform, offer a tremendous value," Craig Hallum analysts wrote in a
note cited by Reuters.Analysis by Dave Lee, TheIndianSubcontinent North America technology reporterHere's a deal that makes perfect sense
While $2.1bn is a pretty hefty premium given Fitbit's market value was around the $1.4bn-mark last week, it's small change when considered
against the bigger picture of gaining a huge amount of health data.For Fitbit, it's a noble exit after putting up a decent fight in the
years since the launch of Apple's smartwatch
A Fitbit-Google product could mean Wear OS - Google's wearable operating system - will get a much-needed boost
I do wonder, though, how Fitbit's 28 million users will feel about this.Anecdotally, I know several people who have told me that Fitbit's
relative autonomy from the tech giants was an incentive to buy their products (though Fitbit has used Google's cloud to support its service
since 2018).By next year, the health data Fitbit has on its users today will become Google's data - a valuable acquisition for Google,
undoubtedly, but one that I predict could make consumers uncomfortable.
