Welcome to Alphabet City.
I'm your guide Iyaz Akhtar and you are the pizza loving audience.
Holy mackerel, we're finally getting a Google watch.
Google is buying Fitbit for $2.1 billion.
The deal sees Google paying $7.35 in cash per share.
For the acquisition, the whole thing should close in 2020.
Our port by the information says that Facebook was in talks to buy Fitbit for around a billion dollars but Google won out without been dark Facebook Fitbit.
In the blog post announcing the deal head of Google hardware Rick Osterloh says The company sees an opportunity to introduce Made by Google wearable devices into the market.
Keep in mind that Google is the company buying Fitbit, it's not Alphabet.
That's a smart move.
Instead of having Fitbit outside of Google under Alphabet, You've got Fitbit within Google.
It looks like Alphabet has learned from the Nest experiment.
Nest went from a Google owned company to an independent company under Alphabet, and then back under Google after that.
Let's talk about Fitbit.
During its [UNKNOWN] back in 2015 Fitbit was worth $4.1 billion.
Fitbit purchase smartwatch maker pebble in 2016 for under $40 million but no hardware was picked up.
Here is Fitbit current lineup.
There's the inspire the charge three Ace to it.
Ionic the virtual light and the versa to that fitbit versa to is the highest end fitbit smartwatch which also has alexa on it you can bet that's getting the boot when google takes over fitbit smart watches use their own operating system called fitbit os which has its own apps their strongest starbuck, pandora, weather, flipboard ,yelp, hue lights.
The New York Times.
There's also Fitbit health apps Of course, Fitbit OS will likely be phased out for wireless.
Google already has Google Fit as a brand, so Fitbit should fit in just fine.
Let's look at Google's hardware acquisitions.
The company bought Motorola then sold off Motorola Mobility to Lenovo.
The Moto Home business went to Arris.
We already talked about the whole Nest deal.
Also Google picked up parts of HTC's phone business, which brought us the latest Pixels.
So Google's hardware business is respectable.
Adding a Fitbit should be very interesting.
Fitbit already has brand recognition but was struggling in the smart watch sector.
According to Strategy Analytics in the second quarter of 2019 Twelve million smart watches were shipped.
Apple has 46.4% of the market.
Samsung is the number two player with 15.9%.
Fitbit fell to third with 9.8%.
Keep in mind that Samsung watches do not run Wear OS.
Looking at all wrist worn wearables, which includes watches as well as fitness trackers, IDC reports that Fitbit was fourth worldwide The second quarter of the year Xiaomi apple and Huawei to the top three spots,Samsung was number five.
So Fitbit position in the market is not that great.
That also explains why the company would entertain the idea of being acquired.
What can Google bring to the table to make Fitbit bigger than it already is.
Google does make some decent hardware products but it's magic is usually the software.
CNET's Scott Stein thinks that Google could help Fitbit devices get smarter thanks to Google's AI.
He also thinks Google can help Fitbit get FDA clearance on sleep and heart rate measurements.
That should make the hardware more competitive With the Apple Watch, can Google use Fitbit OS to make wireless better?
Or perhaps fitness designers and engineers can help Google figure out wearables either way, Google's approach to wearables is fundamentally changed.
Now that is a maker of wearables.
It's one thing to provide the software to others.
It's a whole other world.
When you're making the hardware runs on a Google acquisition also immediately brings up privacy concerns.
Again, it's one thing a Fitbit has your health data.
It's another if Google has it.
Fitbit has over 28 million active users.
Its app has lots of community features.
There's a lot of data for Google to pick up in the blog post also addresses the privacy concerns.
He says quote privacy and security are paramount we will be transparent about the data we collect and why Fitbit health and wellness data will not be used for Google ads and we will give Fitbit users the choice to review move or delete their data let's all cross our fingers and hope we actually get a great where us watch.
Because that has never happened before.
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Last time i ranted about how the pixel four was a disaster.
RM says Google's plan to sell more pixel threes introduce the pixel four Raleigh says I'm still using my Nexus 6 and 6P.
Every year Google messes up these phones.
Brian M says why the surprise?
Every pixel has been a disaster.
Christopher says thank you for being honest.
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