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Google Buys Fitbit With the Long Game in Mind $GOOGL $FIT

The rumors were true: Google confirmed yesterday it’s reached a deal to pay $2.1 billion cash for wearable fitness tech maker Fitbit. It’s Google’s biggest consumer tech acquisition since it bought Nest five years ago.
The deal feels like asking a personal trainer to throw a medicine ball at your abs: it costs a lot of money, but it should be worth it come beach season.

The six-pack Google’s after?

Let’s just say Tim Apple never skips a workout. Buying Fitbit will give Google a leg up in hardware, a corner of Big Tech Google rival Apple has consistently dominated. 
But Google’s bulking up. Its hardware portfolio has expanded in recent years to include Nest thermostats and cameras, smart speakers, Pixel smartphones, and more. One missing element: a smartwatch designed to compete with the Apple Watch.
  • Enter Fitbit, which has sold over 100 million devices since its 2007 founding and boasts over 27 million active users. 
  • Still, the Apple Watch claimed almost 38% of the wearable device market in Q2, per Canalys data. Fitbit was the first place loser with 24.1% market share.

But results don’t happen overnight

You know what they say about Big Tech M&A: big antitrust concerns. For Google, current investigations center in part on potentially anti-competitive practices in its handling of consumer data. And fitness trackers are privy to all sorts of personal info, from heart rate to sleep habits to menstrual cycles.
  • Rep. David Cicilline, chairman of the House antitrust subcommittee, said in a statement the acquisition "deserves an immediate and thorough investigation." 
+ While we’re here: According to The Information, Facebook courted Fitbit before Google swooped in with an offer roughly double the size of Zuck’s. There’s your proof all the big players in Silicon Valley have hardware on the brain.

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