母公司Alphabet收购Fitbit（NYSE：FIT）的小道消息就已经被媒体爆出。 The news of Google ’s parent company Alphabet acquiring Fitbit (NYSE: FIT) has been reported by the media. And this Friday, the rumor became a reality, Google and Fitbit released news at the same time, announcing that a final agreement has been reached.
Fitbit was acquired by Google LLC for $ 7.35 per share, with a total value of approximately $ 2.1 billion. The transaction is expected to be completed in 2020, subject to customary closing conditions, including approvals from Fitbit shareholders and regulatory approvals.
苹果 在可穿戴设备领域的市场差距在拉大。 In recent years, the gap between Google and Apple in the field of wearable devices has widened. 华米 和华为在这个领域的多年深耕之后，也取得了可喜的成绩。 At the same time, after years of intensive cultivation in this field , Chinese brands Huami and Huawei have achieved gratifying results. The acquisition, which was disclosed on Friday, represents Google's enhanced lineup of wearable hardware products.
According to the IDC report, the top five wearable manufacturers in Q1 2019 are Apple, Xiaomi, Huawei, Samsung, and Fitbit. With Fitbit being captured by Google, Google will issue a strong challenge to the top four.
Who is Fitbit?
Fitbit is a very important player in the wearables field, and together with Jawbone (the company has been liquidated) is considered a pioneer and benchmarking company in wearables.
Fitbit was founded in San Francisco in March 2007, and it has been 12 years. In 2009, Fitbit launched a wearable wrist device before the smartwatch, the first generation FitbitTracker. This product has been well received since its launch. With features such as message reminder and sports tracking, it has been popular in North America in less than 3 years.
According to NPD's market report on fitness tracking equipment surveys in the third quarter of 2014, Fitbit's market share has reached 69%-far more than the 14% share of Jawbone.
At this time, Apple, Huami and Huawei have not yet entered the game.
Fitbit was listed on the New York Stock Exchange on June 18, 2015, becoming the first share of wearable devices. On August 5, 2015, Fitbit's stock price reached a historical peak of $ 51.90.
However, the market changed after Apple launched the AppleWatch in 2015. Apple has been adding new health features to its AppleWatch, such as exercise tracking, heart rate monitoring, and electrocardiograms, making it a direct competitor to Fitbit. Although Fitbit has also launched more feature-rich smart watches to compete with Apple, it has been unable to keep up with the pace of the tech giants.
At the same time, Fitbit also encountered major setbacks in the low-to-mid-end segment. As Huami and Huawei entered the market in 2014 and 2015, their wristbands and watch-type devices swept the Chinese market at low prices. What competitiveness.
In addition, after the air outlet, the market heat of wearable devices has significantly cooled. One reason was that wearables were too monotonous at the time, and user stickiness was low. At the same time, wearable devices seem to collect a lot of data, but this data has no more value.
En Yuanyuan released in early 2014
The NPD predicts that the wearable device market will begin to cool in 2016 and will not recover again until the wearable device becomes a necessity or the industry consolidates.
With such fierce market competition and reduced user stickiness, Fitbit's market share, which originally occupied the top of wearable devices, has continued to decline. In Q1 2019, Fitbit shipped 2.9 million units, an increase of 35.7% year-on-year. Although Fitbit's growth rate is not slow, it can only be said that other competitors have run faster and were surpassed by Samsung in the quarter and can only rank fifth.
Fitbit's continued decline certainly has its own product reasons, but the top four manufacturers are all smartphone giants with ecological construction capabilities, which is a major reason.
Large companies in the field of smart devices have established ecology through continuous product line expansion, and it is becoming increasingly difficult for small device manufacturers to survive. Over the past decade, innovative startups such as Nest, Beats, Dropcam, and Flip have been acquired by big Silicon Valley companies.
Fitbit's stock price has been hovering below $ 7 for more than two years, and in August this year, it has fallen to a low of $ 2.81. Fitbit has been struggling to meet investor expectations, facing the challenge of falling sales and profit margins. However, this situation changed dramatically after the first reports of a possible Google acquisition in September.
In an open letter to the acquisition, James Park, co-founder and CEO of Fitbit, said: "Twelve years ago, we set a bold corporate vision-to make everyone in the world healthier. Today I am extremely proud of what I have achieved to achieve this goal. We have built a trusted brand that can support more than 28 million active users worldwide who rely on our products for a healthier and more active life. "
The above paragraph is a summary of Fitbit's past achievements. First, Fitbit has created a segment of the field of smart health equipment, which has indeed brought new applications in the health field to consumers. Second, it has 28 million active users. Fitbit has sold more than 100 million devices to date, using data to provide users with unique, personalized health and exercise guidance.
In addition, Parker mentioned: "Google is the ideal partner for our mission. With Google's resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make it easier for everyone Get healthy. I'm excited about what's coming. "
Yes, besides Apple, what other company can have better resources in the smart device field than Google? At the same time, the market's response was also very positive. On Friday, affected by this news, Fitbit's stock price rose 15%, the current stock price is $ 7.14, and the total market value is $ 1.845 billion.
Why Google Wants Fitbit
Google has been unsuccessful in mobile phones and wearable smart devices. Since launching its smartphone under the Pixel brand in 2016, Google has been pushing hard for hardware development, but its appeal to the market has never met expectations. Google has also spent years trying to penetrate the wearable device market through its WearOS platform, but it has not had a real impact.
It can be seen from Google's layout over the years that the company attaches more importance to software than hardware. However, in recent years, Google has gradually begun to exert its power on hardware. And the acquisition of a company with technology, experience, and relatively mature talent is the fastest way for Google to enter this field, as is the planned acquisition of Fitbit.
In 2017, Google acquired the research and design staff of the HTC smartphone team for $ 1.1 billion to develop its Pixel phones. In January 2019, Google acquired intellectual property rights from Fossil for $ 40 million.
Smartwatches are one of Apple's most important market segments and a flaw in Google's product lineup. Over the years, Google has made progress in this area with partners through WearOS and GoogleFit, but they need a bigger market. Analysts said that by acquiring Fitbit, Google became the closest competitor in the market to Apple.
With this acquisition, Google has benefited a lot.
Very good brand awareness. AndroidWear is not a branded product, and Fitbit has been working for 12 years and has sold more than 100 million units. Brand awareness has been established in the market.
Excellent wearable hardware. Fitbit's hardware features have always been excellent, and the acquisition will provide a solid foundation for the development of Google's future wearable device product line integrated with Android. Of course, Fitbit's high focus on motion tracking can also be naturally integrated into Google's existing GoogleFit application, thus providing a reliable alternative to the integration of GoogleWatch and iPhone. On the other hand, Google's technical capabilities can help Fitbit's smart watches (such as Versa) become smarter, while providing deeper software integration with Android.
Intellectual property. In January of this year, Google will acquire some intellectual property rights of watch brand Fossil for $ 40 million. After the acquisition of Fitbit, the combination of Fitbit and Fossil's intellectual property rights can finally meet the needs of WearOS.
Fitbit's massive health data. The Fitbit platform's activity, exercise and sleep database is one of the world's largest health databases. At the same time, it also has leading health and fitness social networks to provide users with personalized guidance. Fitbit's fitness tracking device monitors users' daily steps, calories burned and length of trips. It can also measure the number of steps to climb stairs, sleep time and quality, and heart rate.
The company has been working with health insurance companies and acquiring in the medical market to expand its revenue stream. Some analysts said that most of Fitbit's current value may lie in its health data.
Any Google push for health data raises privacy concerns, as the company already knows what users are searching for, where and what they are interested in. The parties to this acquisition inevitably made statements regarding the use of the database, saying that they would still take the privacy of health and fitness data seriously, and stated that "Fitbit health and fitness data will not use Google ads."
Medical health applications. Fitbit, after acquiring Pebble, Vector and Coin, is shifting most of its focus to healthcare, and has several important collaborations with healthcare companies. Google and its parent company Alphabet have already made a move in the healthcare field, but Fitbit has gone further than Alphabet in building relationships with the health industry, and has already taken steps to detect arrhythmias and sleep apnea.
Rick Osterloh, Google ’s senior vice president of equipment and services, commented on Fitbit in an open letter: "Fitbit has always been a true pioneer in the industry and has created engaging products, experiences and a vibrant user community. Working closely with Fitbit's team of experts and integrating the best AI software and hardware, we can help drive innovation in wearables and develop products that benefit more people around the world. "
Buying a Fitbit is an opportunity to invest more in WearOS and introduce Google-made wearables to the market. Ostrow believes that Google's hardware business is still relatively young, but has established strong features and product foundations, including Pixel smartphones and Pixelbooks, Nest series of home devices, and so on. "We plan to work closely with Fitbit to combine their respective best smartwatches and sports tracking platforms. Looking ahead, we have the opportunity to work with Fitbit to help more people in wearable devices be inspired by it."
WedbushSecurities analyst Michael Pachter said: "It makes more sense to buy Fitbit than to try to build another Fitbit competitor." Fitbit's accumulation of products and data will allow Google to quickly move to the next level in wearables.
However, most of the market conditions described above are overseas. Whether it is Fitbit, or Google's Pixel or Nest, it can be said to be insignificant in the Chinese market. Fitbit's dominance in sports tracking is also being eaten away by products from domestic companies such as Huami and Huawei.
Possible obstacles to acquisition
The transaction is expected to be completed in 2020 and is subject to approval by standards regulators and shareholders. Since Google has become the focus of antitrust investigations in Europe and the United States, the transaction has been the focus of regulators.
Many antitrust reviews of Google so far have focused on search and advertising for its business. In a filing with the Securities and Exchange Commission, the two companies said that Google would pay Fitbit a $ 250 million breakup fee if the transaction fails to receive antitrust approval.
This acquisition may be the best home for Fitbit, and it also unveiled a prelude to the battle between giants in the wearables industry.