Last month, reports first emerged that Fitbit was considering a sale and Google’s parent company was tentatively floated as a possible candidate. Reuters this morning is reporting that Alphabet has made an offer to acquire the wearable company.
Reuters followed up its original report with the development today that an actual offer has been tendered. Alphabet’s exact acquisition price has yet to be disclosed, but Fitbit stock soared 30% on Monday and trading was briefly halted. It’s not clear how far along negotiations are with CNBC also confirming the offer.
Fitbit has 12 years of experience in the fitness wearable market but is struggling to compete in smartwatches given recent mishaps like the Fitbit Versa Lite that was intended to be a cheaper device. It faces high-end competition from the Apple Watch, which now starts at $199, while Chinese companies are making much cheaper fitness bands.
Regardless, it has a large user base and social network where people often compete. This would kickstart Google’s nascent entrance into consumer health. For the past year, the company has been consolidating teams across Alphabet under a “Google Health” division. This includes Search, AI, Google Fit, Nest, and DeepMind. As we noted last month:
Google’s wearable engineering efforts would also get a boost from Fitbit’s experience in marking miniaturized hardware, while it would get the remnants of Pebble and the current Fitbit OS. It’s unclear how Google would balance that against Wear OS, which has a broad partner ecosystem and OEM model.
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