May a Google Acquisition of Fitbit Result in Smartwatch Success?

The wearables market is racing in the direction of information this 12 months: IDC predicts greater than 152 million wrist-worn wearables shall be offered by the top of 2019 and wholesome development is predicted to proceed. The highest 5 corporations, with virtually 66% of the worldwide market between them, are Xiaomi, Apple, Huawei, Fitbit, and Samsung, in that order. If Google has aspirations in wearables, Fitbit is a manner in, which might clarify the information that Google’s mum or dad firm Alphabet Inc. could have made a suggestion to amass Fitbit.

This revelation relies on a report from Reuters, which cites an nameless supply, and it’s removed from a accomplished deal. We don’t know what the supply seems to be like, if there was one, or whether or not Fitbit will settle for it, however the firm has been struggling of late. If we glance again at IDC’s report, it’s smartwatches which are sprinting forward of the pack, whereas easier health bands, which make up the vast majority of Fitbit’s income, appear to have run out of steam. Beneath strain from a number of low-cost health trackers, particularly from Xiaomi, and struggling to transition to smartwatches the place Apple is dominant, Fitbit has been caught between a rock and a tough place. It has dropped costs — and income have gone down with them. Although we favored the Fitbit Versa Lite, the stripped-down smartwatch was not successful and was blamed for a decline in income that despatched Fitbit’s shares tumbling in the summertime.

Fitbit Versa Lite ReviewKelly Hodgkins/Digital Developments

It’s not tough to see why Fitbit could also be open to an acquisition, however why would Google transfer on this course?

If we take a look at Google’s line-up, from the Pixel four to the Pixelbook Go to the Nest Mini, there’s nonetheless a spot for a wearable and the Pixel Buds 2 aren’t going to fill it. Google doesn’t at present make smartwatches or health trackers, however it does supply Put on OS software program, which is specifically designed for smartwatches. The issue is that it’s not superb and never one of many prime 5 wearables gamers is utilizing it.

Rumors a few Pixel Watch have been circulating for years, however it was a no-show at Google’s newest occasion. There’s little doubt that Google has labored on totally different smartwatch designs, the truth is, six former workers revealed to Enterprise Insider Pixel Watch was set to be unveiled alongside the unique Pixel cellphone in 2016, however was axed amid fears it could tarnish the model. Reportedly the LG-manufactured smartwatches ended up being launched because the LG Watch Sport and the LG Watch Model, which debuted Google’s Android Put on replace. The poor critiques counsel Google was proper to drop them.

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A mysterious $40 million cope with The Fossil Group in January, which noticed Google purchase some mental property and the analysis and growth staff behind it, is a powerful trace that Google remains to be planning a smartwatch. Google’s push in the direction of a hands-free future and this concept of “ambient expertise” the place a disembodied Google Assistant is our conduit to the closest might chime neatly with a microphone and speaker in your wrist. A Pixel Watch would additionally match properly into its wider ecosystem and pair up with Google’s Pixel telephones and its rising good residence portfolio.

However these are all explanation why Google may need to make a smartwatch. Why would it not purchase Fitbit with that aim in thoughts? In any case, Fitbit has been struggling to interrupt by on the smartwatch facet, greater than 50% of its gross sales nonetheless come from health trackers. Fitbit OS grew out of Pebble’s software program and it feels primary and just a little missing in options and app assist, so it’s arduous to think about that’s a motive. Design-wise, whereas they’re solidly constructed, Fitbit smartwatches just like the Versa 2 really feel by-product and uninspired.

What Fitbit does have, that Google lacks proper now, is a big group of customers sporting its units and sending all that health and health-related information to its servers. Google is all about accumulating information, making use of machine studying, and utilizing it to develop insights and smarter software program. Although Google Match is extensively accessible on Android, Put on OS, and even iOS units, it has far fewer lively month-to-month customers than Fitbit. A report from final 12 months protecting the most well-liked well being and health apps within the U.S. urged Google Match has 2.6 million month-to-month distinctive customers in comparison with Fitbit’s 27.four million.

On prime of all that information, Google would additionally acquire Fitbit’s algorithms. Each firm engaged in health monitoring has its personal set of secret algorithms for counting steps, measuring energy burned, and monitoring sleep.

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One other potential motivation could lie in Fitbit’s transfer into the healthcare market, a facet of the enterprise that has been rising steadily. Fitbit has offered lots of units by company wellness packages and it has began to efficiently goal well being insurers. Fitbit additionally partnered with Google on this area, adopting its Google Cloud for Healthcare platform which gives a safe approach to share delicate medical information. There’s a rising realization that monitoring units might save the healthcare business, significantly insurers, an unlimited amount of cash and Fitbit is well-placed to step in.

If the acquisition goes forward, it’s not clear how Fitbit could be built-in. One of many very legitimate causes Fitbit didn’t undertake Put on OS was to take care of good battery life in its units. Google can’t simply put Put on OS on Fitbit units and anticipate it to be a hit. However it could be bizarre for Google to personal a wearables model that doesn’t run its personal platform.

It’s arduous to think about Google having successful smartwatch with out attractive design and main enhancements to Put on OS and shopping for Fitbit received’t tick both of these packing containers. It’s at all times doable some longer-term grasp plan will emerge and Google will leverage the Fitbit model to end up a tremendous new wearable that’s match to compete with the Apple Watch, however it seems to be like a protracted shot proper now.

The views expressed listed here are solely these of the writer and don’t mirror the beliefs of Digital Developments.

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