Google is launching a takeover of fitness tracker firm Fitbit that could spell very bad news for Apple and other rivals in the smartwatch business.
The deal, worth around $2.1bn (£1.6bn), is Google’s largest acquisition since it paid $3bn (£2.3bn) for smart home tech firm Nest five years ago and could see the company move into the smartwatch world as a first-party player.
Google is “paying cash” for the San Francisco-based tracking firm, The Guardian reports. It will shell out $7.35 per share for Fitbit, which represents a “premium of more than 70%” on Fitbit’s share price before trading was suspended late last week.
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The deal is “not done yet”, The Verge says, as regulators in the US may “decide that it’s time to stick it to Google”.
But with the takeover tipped to go ahead, Google’s grip on the tech world looks set to get even tighter.
Why is Google purchasing Fitbit?
In recent years, Google has expanded beyond its roots as the go-to online search engine and delivered a portfolio packed with software, operating systems and - more recently - a range of hardware devices.
Its Pixel smartphone range is widely regarded as a true rival to Apple’s iPhones and the Samsung Galaxy range. The same can be said for its Home range of smart speakers, which competes closely with Amazon’s Alexa-powered Echo speakers.
While it is already a player in the smartwatch market courtesy of the Google Fit app and its Wear OS (formerly Android Wear) operating system, Android Central notes that the Fitbit takeover opens up the possibility of Google integrating the fitness tracker firm’s products into its hardware line-up.
How Google will do this is unclear, the tech site says, but its hardware chief Rick Osterloh hinted that the deal may result in it releasing “Made by Google wearable devices into the market”.
Not only does the takeover allow Google to move into the smartwatch world, but it will no doubt provide “a very powerful amount of personal data that Google will potentially have access to”, TechRadar reports.
Naturally, this has raised some concerns over user privacy, The Daily Telegraph says. Google has gone to “great lengths to dispel users’ fears that data such as their heart rate and exercise levels would be used against them”.
But Google is “notoriously ruthless about changing strategy”, the newspaper argues, so customers “should be cautious” about the search giant’s intentions.
Should Apple be worried?
Possibly. The takeover is certainly the clearest sign yet that Apple’s position at the top of the smartwatch pile may come under threat, but Google has a mountain to climb to reach its rival.
In North America alone, the Apple Watch currently occupies a 37.9% share of the smartwatch market, notes TechCrunch. The only Wear OS device maker to “crack the top five” is Fossil, with just a 4.1% share.
Apple aside, Fitbit “does the best job taking all of that raw data and making it into something its users find genuinely useful”, says Android Central. When it launched in 2007, the company was among the first to offer a wearable tech device and its products are still popular with consumers today.
Fitbit’s ability to turn “accelerometer and heart rate data into visualisations and actionable intent” has since been copied by the opposition, the tech site says.
If Google can merge its technical knowhow with Fitbit’s popularity, the tech giant has every chance of taking the fight to Apple in the smartwatch space.
