- Companies pledge to protect user data, but already observers and lawmakers sceptical.
News of the deal first surfaced in a Reuters exclusive on October 28.
While Google is no stranger to hardware - it has its Pixel smartphone, mobile computing devices and home Internet accessories, among others - this is the first time it will be testing the wearable waters, a segment filled with players that have, to the strictest sense, similar offerings.
However, Google's strength in Internet technologies and software, plus the possibilities of integrating its would-be wearables to its sprawling global network - if and when that happens - could be key differentiators.
"We have built a trusted brand that supports more than 28 million active users around the globe who rely on our products to live a healthier, more active life," James Park, Fitbit's co-founder and CEO, said in a statement from the two companies.
"Google is an ideal partner to advance our mission."
The global wearables market is highly competitive. According to to an International Data Corporation report for the second quarter of 2019, as previously reported by Khaleej Times, Xiaomi maintained its position atop the list, thanks to its Mi Band 4, followed by Apple, which recently launched its Apple Watch Series 5. Huawei came in third, thanks largely to its strategy of bundling its wearables with its smartphones in certain markets.
Fitbit was fourth, boosted by large-scale tie-ups, including supplying bands to Singapore's public health initiative and joining hands with the Dubai Festivals and Retail Establishment for this year's Dubai Fitness Challenge. Samsung came in fifth, but it posted the biggest growth in the top five because of its new low-cost devices.
Fitbit was founded in 2007, and since then it has logged staggering user data to date.
As of the second quarter of this year, users have recorded over 228 billion hours of heart rate data, 517 billion minutes of exercise, 202 trillion steps and 10.5 billion nights of sleep have been logged.
Fitbit shares have rocketed 40 per cent since news of the Google deal first emerged.
"We believe Google is a natural fit. The deep health and fitness data, coupled with the 28 million active users on the Fitbit platform, offer a tremendous value," analysts from Craig Hallum wrote in a note.
Inevitable scrutiny
However, as with any other tie-up between two titans, the Google-Fitbit deal is sure to attract needling.
On Friday, Reuters reported that US antitrust regulators have little reason to oppose plans by Google's parent Alphabet to buy Fitbit, but that does not mean, backed a bevy of anti-Google lawmakers, US officials won't give the proposed purchase extra scrutiny.
Fitbit had already pledged to protect its users' data, saying on Friday that "we will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads".
Observers aren't too convinced.
"There are so many ways to finesse that statement," Joseph Turow, a privacy expert who teaches at the University of Pennsylvania. "We have to figure out what that really means."
Even US lawmakers have chimed in already this early.
"Google and many of the other largest tech companies are building broad, intersecting empires of information about consumers through hundreds of acquisitions that are too often not scrutinised, much less challenged," Representative Pramila Jayapal, a Democrat from Washington, said in a statement, urging tough scrutiny for the deal.
Google said that it sees an opportunity to introduce 'Made by Google' wearable devices into the market and invest more in wearable technology.
In the event Google fails to obtain antitrust approval for the deal, Fitbit says the Internet company would need to pay a termination fee of $250 million.
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