Google is acquiring Fitbit for $2.1 billion, or $7.35 per share, the companies revealed today.
With the purchase, Google gets access to a wearables business that is largely dominated by Apple Watch. Apple, for example, made $2.1 billion from wearables last quarter (a segment that includes both its watch and AirPods).
Google will use Fitbit’s expertise to improve its own wearables, known as Wear OS, and introduce “Made by Google” wearables into the market. It also inherits Fitbit’s passionate user base – which includes 28 million active users.
Both companies emphasized Fitbit’s security around user data.
“Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why. The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads,” Fitbit said in its press release announcing the acquisition.
Fitbit users can “review, move or delete their data,” Google SVP of devices and services Rick Osterloh said in a blog post announcing the acquisition. It will let users know about what data it collects, he pledged. “We will be transparent about the data we collect and why.”
But smartwatches capture far more than health and wellness data, including location and everything that can already be tracked by a mobile phone.
And while Fitbit is known for its activity trackers, it derives significant business from smartwatches – which accounted for 44% of all sales in 2018.
While Fitbit has sold 100 million devices in its 12-year history, its stock took a dive after going public, cresting at one point at $30 per share, but over the past two years it has traded for below what Google is paying to acquire it.
The Fitbit deal shared some similarities with Nest, acquired for $3.2 billion in 2014. First organized under Alphabet, the smart home devices, including thermostats and smoke alarms, starting going by the name of Google Nest this year. So it may just be a matter of time before Google Fitbits enter the market.