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Why did Google acquire Fitbit for over $2 billion?

  • Related to Product Strategy
  • For Generalist PM
  Google
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Answers (2)

Let’s look at the Market leaders in Wearables

  • Apple
  • Amazon is getting there (Ahead interms of Voice Assistant)
  • Samsung
  • Few others but Fitbit pops out in the top 4 wearable tech
Now let’s look at what Google didn’t have that Fitbit had.
  • Google has wearOS but no hardware – This wasn’t google strength
Let’s look at Google’s ecosystem
  • Google is on Phone (Android), Home (Via Assistant), Android TV, Android Auto – One of the missing piece is the Wearable hardware tech that is key to getting ahead with Ambient computing.
    • Couldn’t Google build it?  It is a classic build v/s buy problem and when it comes to hardware it is better to buy as Google isn’t known for hardware.  Not impossible to build it but takes time and effort and if Amazon buys it, then it slows Google’s race
Competition:
  • Amazon
What about Data?
  • Google has data – Way more than what Fitbit has.  The additional data that it would get by acquiring Fitbit is marginal.  Although it helps this isn’t the primary reason why Google acquired this, IMHO
In Summary:  By acquiring Fitbit, Google will add wearable hardware tech to it’s ecosystem which takes Google’s ambient computing vision to one step further and helps Google to  be still in the race with Amazon – Any additional user data from Fitbit is a bonus of this entire deal.

Google acquired Fitbit for five main reasons listed below: 

1) Access to Fitbit Data

Fitbit is used by millions of users worldwide. Fitbit is known for having some of the best health and fitness tracking features. Fitbit has very rich data on users. By acquiring Fitbit, Google gets access to this personal data of users. Google can use this data and has flexibility to use it on a long term basis for any of the potential usecases.

2) Compete in Wearables Market

Google has hardly made any dent in the wearables market with its WearOS. Apple and Samsung are market leaders and Fitbit being there in mix. By acquiring Fitbit, Google can surely compete with Apple and Samsung on the lower end of the market. A lot of consumers are looking for cheaper smart watches. Google can even build other wearables by gaining expertise from Fitbit on developing low cost hardware products.

3) Access to Hardware

Google has superior AI and software capabilities to build great user experiences but it needs the hardware to put that software on. With current google products such as Google Fit, Google has not been able to provide users with a superior experience. To provide the complete experience, Google will need the amazing fitbit sensor technology and combine that with Google’s superior software to provide a much better experience which can compete with Apple and Samsung.

4) Healthcare space

With the great fitness and health data available at its fingertips, Google can launch some amazing products in the healthcare domain by targeting relevant use cases. It can also integrate Fitbit with Google Health and further enrich consumer health data.

5) Competitive Advantage

By acquiring Fitbit, Google makes sure that its competitors such as Amazon, Apple and Facebook do not acquire Fitbit and somehow strengthen their position. It also gives them advantage over Amazon and Facebook who were looking to get into this space with similar products.