Wearables market big player Fitbit announced on latest 1st November that they had entered into a definitive agreement to sell the company to Google LLC for a total consideration of $2.1 Bn ($7.35 per share). The price will be paid by Google in cash.
The transaction is expected to close in 2020, subject to customary closing conditions, including approval by Fitbit’s stockholders and regulatory approvals, but beyond the mentioned approvals there’s another ingredient needed for this transaction to become a true success: Keeping the trust of the customers that let Fitbit manage their health data to receive the services that the wearables provide.
Conscious of this point and that Google is one of the biggest digital advertising and big data giants in the world, Fitbit underscores: “Consumer trust is paramount to Fitbit. Strong privacy and security guidelines have been part of Fitbit’s DNA since day one, and this will not change. 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.”
“Similar to our other products, with wearables, we will be transparent about the data we collect and why. We will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data,” Rick Osterloh, Senior Vice President, Devices & Services at Google underscored.
Another point to be considered is the fact that Google is the owner of Android and the effects on the free competition field that the purchase of Fitbit by Google could bring.
On this issue Fitbit assures that they will continue to remain platform-agnostic across both Android and iOS after the purchase.
Following Statista projections for the wearables market, in 2019 about 45% of all smart wristwear shipped worldwide will have Apple’s watchOS as its operating system
The acquisition of Fitbit is another step forward in the wearables market for Google sho had already increased its investments in this field with the purchase of Fossil smartwatch tech for $40 million in early 2019.
The merger of Fitbit will provide Google a better foothold in the wearables market where the tech giant is far less introduced than Apple or Xiaomi after five years since they launched the Wear OS platform and tbhe Google Fit app.
Fitbit pioneered the wearables category by delivering innovative, affordable and engaging devices and services. Being “on Fitbit” is not just about the device, it is an immersive experience from the wrist to the app, designed to help users understand and change their behavior to improve their health. Because of this unique approach, Fitbit has sold more than 100 million devices and supports an engaged global community of millions of active users, utilizing data to deliver unique personalized guidance and coaching to its users.
Fitbit, losing share and Google still not taken off in a 14.528Bn market, expected to reach the $17.427Bn by 2023
Following the latest analysis on the wearables market published by Statista, Fitbit has been proggresively losing share in the total worldwide shipments of these products from the 44,7% and the leading position the company accounted for in 2014, to the 5.9% and 5th position they had on 1stQ 2019.
With a 25.8% of total shipments Apple currently is the worldwide leader in the wearables arena, followed by Xiaomi (13.3%), Huawei (10%) and Samsung (8.7%).
Statista’s data as of july 2019 were that revenue in the wearables segment amounts to $14.528Bn in 2019 and it is expected to show an annual growth rate (CAGR 2019-2023) of 4.7%, resulting in a market volume at $17.427Bn by 2023.
The average revenue per user (ARPU) currently amounts to $41.47.
User penetration reaches the 4.8% in 2019 and is expected to hit 4.8% by 2023, with the highest penetration in the 25-34 years old segment (36.4%) and 35-44 years old group (26.3%)
Most of the revenues are generated in China ($4.599Bn in 2019). Then come The USA ($3.096Bn), India ($1.446Bn), UK ($482Bn) and Germany ($423 mill).
A win win merger
James Park, co-founder and CEO of Fitbit said on this transaction, “More than 12 years ago, we set an audacious company vision: to make everyone in the world healthier. Today, I’m incredibly proud of what we’ve achieved towards reaching that goal. We have built a trusted brand that supports more than 28 million active users around the globe who rely on our products to live a healthier, more active life,”…“Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone. I could not be more excited for what lies ahead.”
Rick Osterloh, Senior Vice President, Devices & Services at Google underscored: “Fitbit has been a true pioneer in the industry and has created terrific products, experiences and a vibrant community of users,”… “We’re looking forward to working with the incredible talent at Fitbit, and bringing together the best hardware, software and AI, to build wearables to help even more people around the world.”
“Three and a half years ago, I joined Google to create compelling consumer devices and services for people around the world. Our hardware business is still relatively young, but we’ve built a strong foundation of capabilities and products, including Pixel smartphones and Pixelbooks, Nest family of devices for the home, and more. Google also remains committed to Wear OS and our ecosystem partners, and we plan to work closely with Fitbit to combine the best of our respective smartwatch and fitness tracker platforms,” Osterloch explained.
In contrast, Fitbit’s diverse line of products include Fitbit Charge 3™, Fitbit Inspire HR™, Fitbit Inspire™ and Fitbit Ace 2™ activity trackers, as well as the Fitbit Ionic™ and Fitbit Versa™ family of smartwatches, Fitbit Flyer™ wireless headphones, and Fitbit Aria family of smart scales.
The company sells its products in approximately 39,000 retail stores and in 100+ countries around the globe.
Powered by one of the world’s largest databases of activity, exercise and sleep data and Fitbit’s leading health and fitness social network, the Fitbit platform delivers personalized experiences, insights and guidance through leading software and interactive tools, including the Fitbit and Fitbit Coach apps, and Fitbit OS for smartwatches.
Fitbit’s paid subscription service, Fitbit Premium, manages users’ unique data to deliver actionable guidance and coaching in the Fitbit app to help them reach your health and fitness goals. Fitbit Health Solutions develops health and wellness solutions designed to help increase engagement, improve health outcomes, and drive a positive return for employers, health plans and health systems.
Image over the headline.- © Fitbit.
