Alphabet announced on Friday that it will acquire Fitbit for approximately 2.1 billion dollars, bringing Google’s parent company into the crowded and competitive terrain of portable fitness technology.
Fitbit is a pioneer of such portable technology, but has come under pressure from other manufacturers of similar devices. For its part, Google has been developing Wear OS software for other manufacturers to make portable devices, but have not gained enough strength in the face of competition from Fitbit, Apple, Samsung, among other companies.
The agreement to buy Fitbit could give Google the boost it needs.
“Google doesn’t want to stay out of the party,” said analyst Daniel Ives of Wedbush Securities. “If you look at what Apple has done with portable devices, it’s a missing piece in Google’s puzzle.
Matt Stoller of Open Markets Institute, a research group focusing on competition and consolidation, reported that health is one of the few industries large enough to help a company the size of Google continue to grow.
The agreement, which is expected to be finalized next year, will likely face scrutiny from federal and state antitrust agents, who have opened several inquiries this year. “Obviously it’s embarrassing for managers if they allow it without any inspection,” Stoller said.
Fitbit manufactures a range of devices ranging from basic trackers, such as those that count a person’s steps, to smart clocks that can display messages and notifications that reach the cell phone.
They can also track a variety of physical activities, such as running, cycling and swimming, along with heart rate and sleep patterns. Fitbit usually asks for the user’s date of birth, gender, weight and height to help it calculate calories and other things. Some people also use Fitbit devices and their app to track their food and water consumption. Women can also have records of their menstrual periods.
However, that probably won’t prevent Google from taking other personal information from the products. Fitbit also has GPS models that could track users’ locations. That could help Google know that a runner stopped at a coffee shop on his way back from business, allowing Google to display ads from rival coffee shops.
More importantly, having a Google device on your wrist could cause users to use Google’s services even more, giving the company more ways to collect data and sell ads.
Google’s ad indicates that Fitbit will be absorbed into the company’s core businesses, rather than remaining an independent subsidiary of Alphabet.
Fitbit has 28 million active users worldwide and has sold more than 100 million devices.