Google buys Fitbit for $2.1 billion to force the wearable device market
Release time:2019-11-15 21:09:51
A week after the news that Google plans to acquire Fitbit, it was finally confirmed.
On Friday, Google’s parent company, Alphabet, announced that it will acquire wearable device maker Fitbit for $7.35 a share, totaling about $2.1 billion, and the deal is expected to be completed by 2020. Affected by good news, Fitbit's share price rose more than 16% before the market.
After the news was released, Rick Osterloh, senior vice president of Google devices and services, said: "Fitbit has always been a true pioneer in the industry and has created an excellent product, experience and a vibrant user community."
"We look forward to working with the Fitbit team. Work and bring together the best hardware, software and AI to create wearable devices to help more people around the world.”
Fitbit, founded in 2007, is indeed the pioneer of wearable health trackers, and has never been in the limelight. After the IPO on August 5, 2015, Fitbit's share price reached a historical peak of $51.90.
However, with the entry of smart watches represented by iWatch, it was once in a difficult position to maintain market share.
According to data from Strategy Analytics as of the end of 2018, Apple's annual shipments accounted for about half of the global smart watch market. According to Fitbit's first-quarter earnings report, its hardware sales grew by more than 30%, but revenue growth was only 5%. In the first half of 2019, the net loss reached 148 million yuan.
This acquisition may be the best destination for Fitbit, and it also unveiled the prelude to the upcoming battle of the wearables giant.
Google’s intentions in the hardware are becoming more and more obvious. In the past October, it has just released or updated its own hardware product list, including mobile phone Pixel 4, laptop Pixelbook Go and so on.
Although Google has not launched its own smart watch, there is news that there is already a team behind the scenes to start research and development. In addition, Google has previously provided Wear OS (the operating system for wearable devices) for the Android market. After the acquisition of Fitbit, the emergence of "Pixel Watch" was only a matter of time.
On the one hand, Fitbit may help Google compete with Apple as soon as possible in the field of smart watches. According to data from market research firm Canalys, the North American wearable device market generated revenues of $2 billion in the second quarter of 2019, with total shipments of 7.7 million, an increase of about 40%. Among them, smart watch sales performance is strong, among the brands Apple and Fitbit ranked one or two.
On the other hand, large-scale access to health data is also very attractive to Google itself. There is no clearer plan for Google to implement the deal, but Rick Osterloh has said it will not be used to sell advertising.
In November 2018, it was reported that Google hired David Feinberg, CEO of Geisinger Health, the US medical system, which will be responsible for the company's new healthcare division to implement its healthcare strategy.
Regardless of changes in personnel and structure, Google has revealed its ambitions in both hardware and health. In fact, not only Google, according to foreign media The Information quoted two people familiar with the news, before the deal was reached, Facebook also offered a price for Fitbit, but the price was only about half that given by Google.
Will the opponent feel a little uneasy when the opponents are pressing harder and the iPhone sales decline and the wearable device sales growth is strong?
Who is Fitbit?
Fitbit is a very important player in the field of wearables and is considered a pioneer and benchmark for wearables alongside Jawbone, which has been liquidated.
In March 2007, Fitbit was founded in San Francisco and has been in business for 12 years. In 2009, Fitbit introduced a wearable wrist device, the first generation of FitbitTracker, before the smart watch. This product has been well received since its launch, and with the help of message reminders, motion tracking, etc., it has been popular in North America in less than three years.
According to NPD's market report on fitness tracking equipment surveys in the third quarter of 2014, Fitbit's market share has reached 69% - far more than the 14% share of Jawbone, the second-ranked.
At this time, Apple, Huami, and Huawei have not yet entered the game.
Fitbit was listed on the New York Stock Exchange on June 18, 2015 and became the first share of wearables. On August 5, 2015, Fitbit's share price reached a historical peak of $51.90.
However, after Apple introduced AppleWatch in 2015, the market has changed. Apple has been adding new health features to its AppleWatch, such as motion tracking, heart rate monitoring, and electrocardiogram, making it a direct competitor to Fitbit. Although Fitbit has also launched a more feature-rich smartwatch to compete with Apple, it has been unable to keep up with the pace of the tech giant.
At the same time, Fitbit also suffered major setbacks in the low-end and mid-range. As Huami and Huawei entered the market in 2014 and 2015, their bracelets and watch devices swept the Chinese market at low prices. Fitbit has almost no domestic market. What is competitive.
In addition, after the tuyere, the market heat of wearable devices has cooled significantly. One reason is that the wearable device features were too singular at the time and the user stickiness was low. At the same time, wearable devices seem to collect a lot of data, but this data has no more value.
According to the forecast released by Enyuan in early 2014, the wearable device market will cool down from 2016 until the wearable device becomes a necessity or the industry will be reintegrated.
Such fierce market competition and reduced user stickiness have made Fitbit's market share of Fitbit, which originally occupied the top of wearable devices, continue to decline. In the Q1 quarter of 2019, Fitbit shipped 2.9 million units, a year-on-year increase of 35.7%. Although Fitbit's growth rate is not slow, it can only be said that other competitors ran faster and were surpassed by Samsung in the quarter and could only rank fifth.
Fitbit's continued decline is of course due to its own products, but the top four vendors are all eco-built smartphone giants, which is a major reason.
Large companies in the field of smart devices have established an ecosystem through continuous product line expansion, and it is increasingly difficult for small device manufacturers to survive. In the past decade, innovative startups such as Nest, Beats, Dropcam and Flip have been acquired by big companies in Silicon Valley.
In the past two years, Fitbit's share price has been hovering below $7, and in August this year it fell to a low of $2.81. Fitbit has struggled to meet investor expectations and faces the challenge of falling sales and margins. However, this situation has changed dramatically since the first report on possible acquisitions in Google in September.
In an open letter to the acquisition, Fitbit co-founder and CEO James Park said: "Twelve years ago, we set a bold corporate vision to make everyone in the world healthier. Today I am extremely proud of what I have achieved to achieve this goal. We have built a trustworthy brand that supports more than 28 million active users around the world who rely on our products for a healthier, more active life. "The above paragraph is a summary of Fitbit's past achievements. First, Fitbit pioneered a segment of smart health devices that really brought new applications to consumers in the health field. Second, it has 28 million active users. Fitbit has sold more than 100 million devices to date, using data to provide users with unique personalized health and sports guidance.
In addition, Parker also mentioned: "Google is the ideal partner to achieve our mission. With Google's resources and global platform, Fitbit will be able to accelerate innovation in the wearable device category, scale up faster and make everyone easier Get healthy. I am excited about what is going to happen." Yes, in addition to Apple, what other companies have better resources than Google in the field of smart devices? At the same time, the market reaction was also very positive. On Friday, affected by this news, Fitbit shares rose 15%, the current share price is 7.14 US dollars, the total market value of 1.845 billion US dollars.
Why does Google want Fitbit? Google
has been very unsuccessful in mobile phones and wearable smart devices. Since the launch of the smartphone with the Pixel brand in 2016, Google has been pushing hard on hardware development, but its appeal to the market has never met expectations. Google also spent years trying to get into the wearable device market through its WearOS platform, but it didn't make a real difference.
As can be seen from Google's many years of layout, the company pays more attention to software than hardware. However, in recent years, Google has gradually begun to exert its power on hardware. The acquisition of companies with technology, experience, and relatively mature talents is the fastest way for Google to enter this field, as is the plan to acquire Fitbit.
In 2017, Google acquired the research and design staff of the HTC smartphone team for $1.1 billion to develop its Pixel phone. In January 2019, Google acquired the intellectual property of smart watches from Fossil for $40 million.
Smart watches are one of Apple's most important market segments and a flaw in Google's product lineup. Over the years, Google has made progress in this area with partners through WearOS and GoogleFit, but they need a bigger market. Analysts say that by acquiring Fitbit, Google has become the closest competitor to Apple on the market.
On Friday, Google’s parent company, Alphabet, announced that it will acquire wearable device maker Fitbit for $7.35 a share, totaling about $2.1 billion, and the deal is expected to be completed by 2020. Affected by good news, Fitbit's share price rose more than 16% before the market.
After the news was released, Rick Osterloh, senior vice president of Google devices and services, said: "Fitbit has always been a true pioneer in the industry and has created an excellent product, experience and a vibrant user community."
"We look forward to working with the Fitbit team. Work and bring together the best hardware, software and AI to create wearable devices to help more people around the world.”
Fitbit, founded in 2007, is indeed the pioneer of wearable health trackers, and has never been in the limelight. After the IPO on August 5, 2015, Fitbit's share price reached a historical peak of $51.90.
However, with the entry of smart watches represented by iWatch, it was once in a difficult position to maintain market share.
According to data from Strategy Analytics as of the end of 2018, Apple's annual shipments accounted for about half of the global smart watch market. According to Fitbit's first-quarter earnings report, its hardware sales grew by more than 30%, but revenue growth was only 5%. In the first half of 2019, the net loss reached 148 million yuan.
This acquisition may be the best destination for Fitbit, and it also unveiled the prelude to the upcoming battle of the wearables giant.
Google’s intentions in the hardware are becoming more and more obvious. In the past October, it has just released or updated its own hardware product list, including mobile phone Pixel 4, laptop Pixelbook Go and so on.
Although Google has not launched its own smart watch, there is news that there is already a team behind the scenes to start research and development. In addition, Google has previously provided Wear OS (the operating system for wearable devices) for the Android market. After the acquisition of Fitbit, the emergence of "Pixel Watch" was only a matter of time.
On the one hand, Fitbit may help Google compete with Apple as soon as possible in the field of smart watches. According to data from market research firm Canalys, the North American wearable device market generated revenues of $2 billion in the second quarter of 2019, with total shipments of 7.7 million, an increase of about 40%. Among them, smart watch sales performance is strong, among the brands Apple and Fitbit ranked one or two.
On the other hand, large-scale access to health data is also very attractive to Google itself. There is no clearer plan for Google to implement the deal, but Rick Osterloh has said it will not be used to sell advertising.
In November 2018, it was reported that Google hired David Feinberg, CEO of Geisinger Health, the US medical system, which will be responsible for the company's new healthcare division to implement its healthcare strategy.
Regardless of changes in personnel and structure, Google has revealed its ambitions in both hardware and health. In fact, not only Google, according to foreign media The Information quoted two people familiar with the news, before the deal was reached, Facebook also offered a price for Fitbit, but the price was only about half that given by Google.
Will the opponent feel a little uneasy when the opponents are pressing harder and the iPhone sales decline and the wearable device sales growth is strong?
Who is Fitbit?
Fitbit is a very important player in the field of wearables and is considered a pioneer and benchmark for wearables alongside Jawbone, which has been liquidated.
In March 2007, Fitbit was founded in San Francisco and has been in business for 12 years. In 2009, Fitbit introduced a wearable wrist device, the first generation of FitbitTracker, before the smart watch. This product has been well received since its launch, and with the help of message reminders, motion tracking, etc., it has been popular in North America in less than three years.
According to NPD's market report on fitness tracking equipment surveys in the third quarter of 2014, Fitbit's market share has reached 69% - far more than the 14% share of Jawbone, the second-ranked.
At this time, Apple, Huami, and Huawei have not yet entered the game.
Fitbit was listed on the New York Stock Exchange on June 18, 2015 and became the first share of wearables. On August 5, 2015, Fitbit's share price reached a historical peak of $51.90.
However, after Apple introduced AppleWatch in 2015, the market has changed. Apple has been adding new health features to its AppleWatch, such as motion tracking, heart rate monitoring, and electrocardiogram, making it a direct competitor to Fitbit. Although Fitbit has also launched a more feature-rich smartwatch to compete with Apple, it has been unable to keep up with the pace of the tech giant.
At the same time, Fitbit also suffered major setbacks in the low-end and mid-range. As Huami and Huawei entered the market in 2014 and 2015, their bracelets and watch devices swept the Chinese market at low prices. Fitbit has almost no domestic market. What is competitive.
In addition, after the tuyere, the market heat of wearable devices has cooled significantly. One reason is that the wearable device features were too singular at the time and the user stickiness was low. At the same time, wearable devices seem to collect a lot of data, but this data has no more value.
According to the forecast released by Enyuan in early 2014, the wearable device market will cool down from 2016 until the wearable device becomes a necessity or the industry will be reintegrated.
Such fierce market competition and reduced user stickiness have made Fitbit's market share of Fitbit, which originally occupied the top of wearable devices, continue to decline. In the Q1 quarter of 2019, Fitbit shipped 2.9 million units, a year-on-year increase of 35.7%. Although Fitbit's growth rate is not slow, it can only be said that other competitors ran faster and were surpassed by Samsung in the quarter and could only rank fifth.
Fitbit's continued decline is of course due to its own products, but the top four vendors are all eco-built smartphone giants, which is a major reason.
Large companies in the field of smart devices have established an ecosystem through continuous product line expansion, and it is increasingly difficult for small device manufacturers to survive. In the past decade, innovative startups such as Nest, Beats, Dropcam and Flip have been acquired by big companies in Silicon Valley.
In the past two years, Fitbit's share price has been hovering below $7, and in August this year it fell to a low of $2.81. Fitbit has struggled to meet investor expectations and faces the challenge of falling sales and margins. However, this situation has changed dramatically since the first report on possible acquisitions in Google in September.
In an open letter to the acquisition, Fitbit co-founder and CEO James Park said: "Twelve years ago, we set a bold corporate vision to make everyone in the world healthier. Today I am extremely proud of what I have achieved to achieve this goal. We have built a trustworthy brand that supports more than 28 million active users around the world who rely on our products for a healthier, more active life. "The above paragraph is a summary of Fitbit's past achievements. First, Fitbit pioneered a segment of smart health devices that really brought new applications to consumers in the health field. Second, it has 28 million active users. Fitbit has sold more than 100 million devices to date, using data to provide users with unique personalized health and sports guidance.
In addition, Parker also mentioned: "Google is the ideal partner to achieve our mission. With Google's resources and global platform, Fitbit will be able to accelerate innovation in the wearable device category, scale up faster and make everyone easier Get healthy. I am excited about what is going to happen." Yes, in addition to Apple, what other companies have better resources than Google in the field of smart devices? At the same time, the market reaction was also very positive. On Friday, affected by this news, Fitbit shares rose 15%, the current share price is 7.14 US dollars, the total market value of 1.845 billion US dollars.
Why does Google want Fitbit? Google
has been very unsuccessful in mobile phones and wearable smart devices. Since the launch of the smartphone with the Pixel brand in 2016, Google has been pushing hard on hardware development, but its appeal to the market has never met expectations. Google also spent years trying to get into the wearable device market through its WearOS platform, but it didn't make a real difference.
As can be seen from Google's many years of layout, the company pays more attention to software than hardware. However, in recent years, Google has gradually begun to exert its power on hardware. The acquisition of companies with technology, experience, and relatively mature talents is the fastest way for Google to enter this field, as is the plan to acquire Fitbit.
In 2017, Google acquired the research and design staff of the HTC smartphone team for $1.1 billion to develop its Pixel phone. In January 2019, Google acquired the intellectual property of smart watches from Fossil for $40 million.
Smart watches are one of Apple's most important market segments and a flaw in Google's product lineup. Over the years, Google has made progress in this area with partners through WearOS and GoogleFit, but they need a bigger market. Analysts say that by acquiring Fitbit, Google has become the closest competitor to Apple on the market.
