Google buys Fitbit for $2.1 billion
Made by Google to challenge Apple in wearables market
Google has confirmed it will buy Fitbit, in a bid to bring Made by Google wearables to market.
Google will pay $7.35 per share for the fitness tracker pioneer, which values Fitbit at $2.1 billion (£1.6bn, €1.9bn). Following news of the potential purchase last week, Fitbit’s stock surged by 30.5 per cent. It added over $330 million to its market cap bringing it to $1.5bn.
Fitbit was founded in 2007 by James Park and Eric Friedman, and went on to become the world's number one purveyor of wearables in 2015. However, its share of the fitness tracking market has been threatened by big brands, such as Apple, Huawei and Xiaomi, which produce lower cost devices to lure new users.
According to data from International Data Corp Xiaomi now dominates the wearables market, thanks to its latest Mi Band 4. It had a 17.3pc market share in the second quarter of 2019, ahead of Apple on 14.8pc, Huawei on 14.1pc. Fitbit was in fourth place, with 10pc of the market.
James Park, Fitbit CEO, said he hopes the partnership with Google will enable Fitbit to “scale faster” in the wearables category.
The search giant has yet to make much of an impact in wearables. However, its Fitbit acquisition follows a $40 million deal in January to buy Fossil Group’s smartwatch technology.
In a company announcement, Rick Osterloh, Google’s senior vice president of devices and services, said that by bringing together the best AI, software and hardware, they hope to “spur innovation” in wearables.
“Over the years, Google has made progress with partners in this space with Wear OS and Google Fit, but we see an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.”