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Alphabet Inc.-owned Google will
buyFitbit Inc.for US$2.1-billion,
as the biggest web-search compa-
ny looks to take on Apple and
Samsung in the crowded market
for fitness trackers and smart-
watches.
Google said on Friday that it
sees an opportunity to introduce
its own wearable devices and in-
vest more in digital health. The
purchase will also bring a rich
trove of health data gathered by
millions of Fitbit’s devices.
Fitbit’s fitness trackers and oth-
er devices monitor users’ daily
steps, calories burned and dis-
tance travelled. They also mea-
sure floors climbed, sleep dura-
tion and quality, and heart rate.
Fitbit’s share of the fitness-
tracking market has been threat-
ened by deeper-pocketed compa-
nies such as Apple Inc. and Sam-
sung Electronics Co. Ltd. as well as
cheaper offerings from China’s
Huawei Technologies Co. Ltd. and
Xiaomi Corp.
“We believe Google is a natural
fit. The deep health and fitness
data, coupled with the 28 million
active users on the Fitbit plat-
form, offer a tremendous value,”
Craig-Hallum Capital Group LLC
analysts wrote in a note. Xiaomi
dominates the global wearables
market, with a 17.3 per cent mar-
ket share in the second quarter of2019, followed by Apple. Fitbit
owns 10 per cent of the market, ac-
cording to data from market re-
search firm International Data
Corp.
Fitbit, which helped pioneer
the wearable devices craze, has
been partnering with health in-
surers and has been making tuck-
in acquisitions in the health-care
market, as part of efforts to diver-
sify its revenue stream. Analysts
have said that much of the com-
pany’s value may now lie in itshealth data.
U.S. antitrust regulators have
little reason to oppose Alphabet’s
plans to buy Fitbit, but that does
not mean that U.S. officials,
backed by a bevy of anti-Google
lawmakers, will not give the pro-
posed purchase extra scrutiny.
Google is already under anti-
trust investigation by the Justice
Department, the U.S. House of
Representatives Judiciary Com-
mittee and dozens of state attor-
neys-general for allegedly using
its massive market power to crush
smaller competitors.
Fitbit has raised privacy con-
cerns in the past: In 2011, the sex-
ual activity of people using the
health and fitness tracker was
found to be publicly accessible
online.
The company said on Friday
that its users’ health and wellness
data would not be used for Google
ads. Google said in a blog post that
it would give Fitbit users the
choice to review, move or delete
their data.
Google, which has been de-
fending its privacy practices after
a number of regulatory probes,
said it would be transparent
about the data it collects for its de-
vices and would not sell that data.Fitbit brings to the deal part-
nerships it has struck with some
large drug companies. In October,
Fitbit announced a collaboration
with Bristol-Myers Squibb Co. and
Pfizer Inc. on early detection of ir-
regular heartbeat, or atrial fibril-
lation, on its devices.
Fitbit in August also launched
its latest smartwatch, Versa 2, add-
ing Amazon.com Inc.’s voice as-
sistant Alexa, online payments.
and music storage to the device’s
capabilities.
Fitbit has been offered US$7.35
a share in cash, the company said,
a premium of about 19 per cent to
the stock’s closing price on Thurs-
day. The company’s shares were
trading up 15 per cent at US$7.11.
Shares of Alphabet were nearly
flat at US$1,263.18.
The company’s shares have
gained more than 40 per cent
since Reuters reported on Mon-
day that Google had made an offer
for Fitbit. The deal is expected to
close in 2020.REUTERSALPHABET (GOOGL)
CLOSE:US$1,272.25,UPUS$13.45
FITBIT (FIT)
CLOSE:US$7.14,UP96USCENTSGoogletopurchaseFitbitin$2.1-billiondeal
Smartw atchmak er
offered$7.35ashare–a
19percentpremiumon
Thursday’sclosingprice
AKANKSHA RANA NOOR
ZAINAB HUSSAIN
Google says it will buy smartwatch maker Fitbit as it looks to invest
more in digital health.JUSTINSULLIVAN/GETTYIMAGES