Google is reportedly considering to make a foray into the wearable market by acquiring Fitbit. Reuters reports that both the companies are evaluating the deal, specifically the amount. If it goes through, it is slated to be one of the biggest deals in the wearables market. As an immediate market reaction to the news, Fitbit’s stock rose about 30 per cent clearly indicating the excitement surrounding the deal.
Some of the industry insiders suggest that there is no guarantee about the deal going through, but if it does, then the search engine giant is sure to be on the benefiting end. Along with easy access to the fitness tracking space, Google can benefit from the expertise built by Fitbit over the years.
With its own product Wear OS, Google has not had much success when compared to the premium product by Apple or the economical variant of Fitbit. Despite the redesign, Google has not had much success with Wear OS and this could be one of the biggest drivers for Google to pitch for the deal.
The wearable market experts have been predicting Google’s strong interest in establishing an in-house smartwatch based on the Pixel brand. It’s worth noticing Google’s acquisition of a smartwatch technology earlier this year that cost the company nearly $40 million. This could be a strong indicator of what Google aims to achieve and that the market pundits may possibly be right about this one.
Google’s hardware strategy has been in line with this one as could be recalled from the company’s acquisition of HTC’s smartphone space for its Pixel phones. As for Fitbit, it already has a positive starting point with Google considering its software services are being powered by Google Cloud. The deal could benefit Fitbit equally to get over its hardware sales struggles and also its tax challenges as far as manufacturing in China is concerned.
As health is increasingly becoming a fast-seller app for smartwatches, there is a huge market to conquer. Fitbit has primarily been about fitness trackers, but its track record has not been great in smartwatches. This is despite its acquisition of Pebble back in 2016. Both the companies have refused to comment further while the market awaits signs of confirmation.