Google to buy Fitbit

Google has agreed to buy Fitbit for $2.1 Billion in a move giving the US tech giant entry into the wearable technology space. The move comes with Google seeking to expand beyond its core the business of online search into hardware, and with Fitbit struggling against rivals including Apple.

While Fitbit was among the first to popularize fitness bands, it has lost ground in recent years to rivals. A survey by research firm IDC for the second quarter of 2019 found Fitbit in fourth place in a market led by China's Xiaomi leading the global market, followed by Apple -- which makes the leading smartwatch -- and Chinese-based Huawei.

Fitbit has introduced its own smartwatch in 2017 but it has failed to keep pace with the Apple Watch. Google, which faces pressure from regulators around the world over its dominance of internet search has been boosting its hardware offerings, including a line of Pixel smartphones and tablets, along with connected speakers.

Fitbit’s fitness trackers monitor users’ daily steps, calories burned and distance traveled. They also measure floors climbed, sleep duration and quality, and heart rate. The company has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.

Google to Fossil Smartwatch Tech

Google and watchmaker Fossil group announced an agreement for the search giant to acquire some of Fossil Smartwatch technology and members of the research and development division responsible for creating it. The deal is worth roughly $40 million, and under the current terms Fossil will transfer a “portion” of its R&D team, the portion directly responsible for the intellectual property being sold, over to Google.

As a result, Google will now have a dedicated team with hardware experience working internally on its WearOS software platform and potentially on new smartwatch designs as well. It’s unclear what exactly that innovation is, or why exactly Google is so eager to buy it, although $40 million is a drop in the bucket for Google when it comes to acquisition costs.

Fossil has been Google’s most consistent and long-term hardware partner on WearOS, since back when it was named Android Wear and Google was looking for watchmakers to help it rival Apple in the wearable space. Fossil has specialized in what are known as hybrid smartwatches: devices that do some minor smart features like step-tracking and notifications, but otherwise look and feel like your standard, semi-expensive wristwatch.

The company makes smartwatches with touchscreens that resemble other WearOS devices and the Apple Watch, but its strong suit has always been the hybrid watch, given Fossil’s design and manufacturing experience in the traditional accessories market. The issue there, however, is that Fossil, while making some of the nicest-looking smartwatches, has been slow to adopt technologies like GPS and heart-rate tracking that have existed on other wearables for years. So in this case, Fossil may have cracked something having to do with hybrid watches, but we just don’t know yet.