Alphabet, the parent company of Google, will be planning to buy Fitbit, putting the tech giant in competition with Apple in the space of fitness tracking. According to the announcement of Friday, the agreement values Fitbit about $2.1 billion at a fully diluted impartiality value. The stock of Fitbit flowed sixteen percent, whereas Alphabet’s shares up around 0.8%. Fitbit said that Google would pay approximately $7.35 per share in the form of cash for the acquisition. The all-time high share price of Fitbit was $51.90 on August 5, 2015, a few months after its debut of the stock market at $30.40. According to the announcement, the deal likely to close in 2020.
The stock of Fitbit surged over thirty percent on Monday after news that Alphabet gave an offer to buy the smartwatch maker firm. The market cap of Fitbit sat at about $1.5 billion as of Monday’s close, and it is up around $340 million from the last trading day. Rick Osterloh, the hardware chief of Google, released a blog post following the announcement, explaining how the purchase can help Google to promote its ambitions for Wear Operating System (Google’s software for smartwatches).
Osterloh said that by working intensely with experts’ team of Fitbit and bringing collectively the best Artificial Intelligence software as well as hardware, they could help shoot innovation in wearables and make products to benefit, especially more people around the globe. Moreover, Google also remains devoted to the Wear Operating System and its ecosystem partners, and they have the plan to work deeply with Fitbit to combine the best of their own smartwatch along with fitness tracker platforms.
Will Google use Fitbit’s health and fitness data for its ads?
According to the official announcement, Google will not use wellness and health data from Fitbit for the purpose of its ads. That did not influence Rep. David Cicilline, D-R.I., who is among leaders of an antitrust investigation into Google. In a statement, Cicilline said that the purchase would also give the firm, deep insights into the most sensitive information of Americans. He said that this projected transaction is the main test of antitrust enforcers’ wish and ability to enforce the law and halt anti-competitive focuses on economic power. It deserves an instant and thorough investigation.
The move comes when Google makes an announcement of a deal to acquire the smartwatch technology of Fossil having a worth of $40 million in January. Though Fossil was one of the other primary brands to make smartwatches on Wear OS of Google, the acquisition of Fitbit could help Google outspread its ambient computing strategy of hardware, where the firm intends to be a part of people’s lives wherever they are. The firm implied at its hardware as well as health ambitions with the introduction of many new products in October, such as Pixel 4 smartphone and the hiring of David Feinberg, the former Geisinger Health CEO last year to combine its health-care strategy.
Fitbit suffered barriers as the famous smartwatch of Apple grows. Fitbit dropped its direction for the year in its earnings release of July, citing less than expected sales of its latest lightweight smartwatch. According to Strategy Analytics, Apple-owned around half of the worldwide smartwatch market as of the 2018’ end, in terms of units shipped. Currently, Google licenses its Wear OS to firms like Fossil, while doesn’t build its own smartwatch.
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