Why Google acquired Fitbit —

Aarav Bajaj
Nov 2 · 3 min read

Google announces a $2.1 billion buyout of Fitbit earlier today. But why?

  1. Winning the future of Wearables

Apple & the Apple Watch dominate the worldwide wearables marketplace with a global lion’s share followed by Xiaomi, Huawei, Samsung & Fitbit. With a CAGR of 4.7%* YOY through 2023 & Shipment forecasts touching 450 million by 2022^, Wearables is a hot space to win in. Google’s acquisition could be seen as a move to obstruct other competitors to get ahead. With Fitbit, Google is all set to expand the Giant’s hardware business adding to Pixel range, Nest, Connected Home & the rest of the ecosystem. WearOS by Google, formerly Android WearOS, might have a new lifeline to take on the WatchOS. Would be interesting to see how Google spins Fitbit post its past acquisitions of Fossil and MisFit. Hoping to see some new additions in a smaller form factor in the ecosystem at next year’s I/O.

2. Talent, Patents & Intellectual Properties

Fitbit brings in-house a couple of hundreds of patents, which adding to Google’s Fossil technology, intellectual property and Alphabet’s tech patents could fortify its technology, software, hardware and AI capabilities in the Wearables space. It would prevent the Big 4 Tech giants from coming in the same direction. In the past, Google spent $40million for Fossil’s smartwatch technology & $1.1billion for bringing HTC’s smartphone Team in-house which have helped develop the Pixel smartphones. Cronologics, a Watch OS start-up, was acquired just to bring the 300+ talent force onboard Google. It’s smarter to invest & acqui-hire a leader in the space than play catch-up inhouse. Google is no stranger to acquiring companies for talent.

Rick Osterloh, Google’s senior vice president for devices and services, had this to say in a statement announcing the acquisition, “By working closely with Fitbit’s team of experts, and bringing together the best AI, software and hardware, we can help spur innovation in wearables and build products to benefit even more people around the world.” The idea is that Google’s products should always be available to help, should you need to make a quick web search. The rest of the time, “the technology just fades into the background when you don’t need it. So the devices aren’t the centre of the system, you are.”

This is typical Google, trying to realize its ambition of putting its services everywhere, all the time. With this move, it has increased its odds of booking a spot on your wrist.

3. User Data

Fitbit’s acquisition would give Google access to a treasure trove of its 28 million users data. And Google loves data. These amassed extensive fitness records could be monetized and find application in Alphabet’s Healthcare focused investments like Verily, 23&Me, etc., including a number of its AI projects to detect blindness, kidney issues & other disorders.

Another area Google could leverage is monetise & add user base to Google’s biggest cash cow: the advertisement business. It could churn this data to selling its ads and services, it could also find applications to better assess the well-being and health-related metrics of its ad targets, finding correlations & causalities between this user data, user activity and behaviour.


I don’t claim to be an expert in M&A, Tech or Wearables. Welcome other perspectives and feedback on this piece. Looking forward to your thoughts.

Sources:* IDC, Wearables Quality Tracker, 2019

^ Gartner, Wearable Electronic Devices, 2018

Header photograph by NBC12

Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated.

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