Fitbit: Apple Watch roadkill

Fitbit, Inc. today announced that it has entered into a definitive agreement to be acquired by Google LLC for $7.35 per share in cash, valuing the company at a fully diluted equity value of approximately $2.1 billion.

Brian Sozzi for Yahoo Finance:

The deal by the deep-pocketed Google for Fitbit makes a degree of sense for the tech beast. For starters, Google obtains sensitive data on how human beings live their lives and their overall health journey… Data is the lifeblood of a tech animal such as Google — and over time paying $2.1 billion for Fitbit’s innermost precious commodity may prove to be a steal.

Fitbit’s plastic fitness trackers and smartwatches are a mere afterthought here, let’s be real. The wearable space is effectively owned by Apple despite what Fitbit tracker loyalists think.

Fitbit’s stock fell slightly below $3 in late August of this year. Its market cap has gone from $6.4 billion in December 2015, according to Yahoo Finance Premium data to Google’s offer price of $2.1 billion. That’s awful.

The company’s profit margins have been shredded due to the greater popularity of the Apple Watch.

MacDailyNews Take: How long until Our Lady of Transitory Endeavor loses interest as Fitbit sales continue to decline as the already dominant Apple Watch’s sales accelerate?

3 Comments

  1. Google will be praised for gaining huge amounts of market share in the smartwatch category after selling current Fitbit devices for half-price. I just know it’s going to be all about gaining market share percentage because that’s how Wall Street thinks about everything.

    So is Google going to somehow manage to get rid of Fitbit OS and stick Android Wear OS on these devices? Are they going to try to push ads directly to fitness watches? Most likely registered users of Fitbit devices will be used to target them with certain types of ads on other Android devices depending upon how active or non-active the user is.

    If anyone takes a look at Amazon’s online fitness band category and they will see it’s just overflowing with low-cost Chinese-made fitness bands and watches. I can’t imagine how Google is going to compete with all those cheap devices even with Fitbit. There’s still craploads of Garmin fitness bands of every shape and size that Google is going to have to contend with. Fitbit was struggling for a reason and I think that reason is an over-saturated low-cost fitness band market.

    I honestly don’t think AppleWatch sales are going to be harmed by this Google/Fitbit partnership. Apple has a pretty tight ecosystem with AppleWatch and iPhone and Apple makes their own SiP chips for AppleWatch which is going to be hard to beat. Even if Google/Fitbit make something exclusive for the Pixel smartphone lineup, it’s not going to have a very large user base. I’m interested to see how this moonshot project turns out. I think Google acquired Fitbit for getting free user data and not so much to make money from selling hardware, but that’s just my take. Trying to go up against AppleWatch with the Ionic didn’t work out and it just seemed so crude next to an AppleWatch. Google can afford pump money into Fitbit but I’m not sure to what end.

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