In November, Google’s parent company Alphabet purchased Fitbit for $2.1 billion. The acquisition makes tremendous sense for Google, which has struggled to enter the lucrative wearables market. Although their Wear OS software powers many successful wearables for brands like Motorola, Fossil, Casio, and Polar, Google has not yet launched a device made for Wear OS. But with the purchase of Fitbit, that will soon change.
Fitbit was not the first wearable fitness tracker, but quickly rose to become the most identifiable wearable on the market. Its devices rely on solid hardware, but their capabilities remain relatively simple. This is where Google, with its advanced AI and powerful analytics, is expected to raise Fitbit to a new level that may finally enable it to go head-to-head with Apple.
Fitness Trackers: A Growing Industry
Google’s purchase of Fitbit is timely. Wearables and fitness trackers are a $4.2 trillion global market that promises to continue growing; in fact, Forbes projects it will become a $27 billion market by 2022. As fitness trackers like those from Lark Health shift to focus on chronic disease management, it’s increasingly likely that wearables will penetrate other generations as well.
Further, Fitbit is not Google’s first foray into wearables and healthcare. In January 2018, Google paid $40 million to buy unused tech that Fossil had acquired from Misfit in 2015. More recently, The Wall Street Journal reported on Nightingale, Google’s harvesting of millions of people’s health data across 21 states as part of a machine learning project. Clearly, the purchase of Fitbit is one part of a multi-pronged plan to remake the U.S. healthcare market on a grand scale.
Google’s acquisition of Fitbit has raised many concerns for Fitbit users. Fitbit stores massive troves of data about its users. Obviously, this is one of the appeals of fitness trackers, that they can tell us detailed, personal information about our health, yet to use these services, we surrender control over that information. Google, who has an incredible 76% market share on web searches, already holds tremendous amounts of information about its users. Marrying that data to its users’ fitness tracker data understandably worries users, who wonder if their data might be exploited for targeting advertising or sold to third parties. Google and Fitbit both claim they will not monetize users’ health data, but users are rightfully wary after a series of egregious privacy violations by Facebook in the past few years.
Another concern is whether it’s good for the fitness tracking market to be dominated by a few large, powerful companies like Apple, Google, and Samsung. While Google could inject much-needed innovation into this market, it stands to squeeze out smaller start-ups, further limiting customers’ choices.
Much of the impact of this deal stands to be seen, and the true impact likely will not become clear for a few years. In the meantime, one thing is certain: the near future of fitness tracking wearables is about to become a whole lot more interesting.