Google parent company Alphabet to buy Fitbit for $2.1bn
Alphabet’s acquisition of Fitbit will give it a boost in the wearable tech market, but the deal has already raised some concerns over data privacy.
Alphabet, the parent company of tech giant Google, has agreed to purchase wearable fitness device firm Fitbit for $2.1bn.
The announcement, which was made on the company blog by Google senior vice-president of devices and services Rick Osterloh, follows a report published by Reuters on Monday (28 October), which said that Google had placed a bid to buy the company. It is now reported that Google will pay in cash.
Osterloh’s statement said that Fitbit “has been a true pioneer in the [wearables] industry and has created engaging products, experiences and a vibrant community of users”.
He continued: “By working closely with Fitbit’s team of experts and bringing together the best AI, software and hardware, we can help spur innovation in wearables and build products to benefit even more people around the world.”
James Park, Fitbit co-founder and CEO, added: “We have built a trusted brand that supports more than 28m 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.”
The deal is still pending regulatory approval and is expected to be closed in 2020.
Commentators have noted that this deal will give Google a significant leg-up in the wearables market, where it has faced stiff competition from fellow tech giants Apple, Huawei and Xiaomi.
However, some have already expressed concern at how the the health data Fitbit collects will be used by its new owner, particularly given that some life insurance companies, such as John Hancock, use this data to sell policies.
If I recall correctly, Alphabet acquiring FitBit means that Google now controls hardware that’s tied to some people’s health insurance coverage?
— Anil Dash is… Dark Mode (@anildash) November 1, 2019
In his statement about the deal, Park said: “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.”
Earlier this year, Google acquired business intelligence platform Looker for $2.6bn. Its last significant consumer purchase, however, was in 2014 when it acquired smart home IoT tech creator Nest Labs for $3.2bn, the second-largest deal in the company’s history at the time.
Its largest acquisition to date was the $12.5bn acquisition of phone manufacturer Motorola in 2011, a business that Google sold three years later for less than $3bn while retaining all of the patents it acquired at the time.