Google parent tees up deal to buy Fitbit wearables
Google owner Alphabet has made an offer to acquire US wearable device maker Fitbit, as it eyes a slice of the crowded market for fitness trackers and smart watches, people familiar with the matter have said.
While Google has joined other major technology companies such as Apple and Samsung in developing smartphones, it has yet to develop any wearable offerings.
There is no certainty that the negotiations between Google and Fitbit will lead to any deal, the sources said, asking not to be identified because the matter is confidential. The exact price that Google has offered for Fitbit could not be learned.
Google and Fitbit declined to comment.
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Fitbit shares rose 27pc on the news, giving the company a market capitalisation of $1.4bn (€1.3bn). Alphabet shares rose 2pc to $1,293.49.
A deal for Fitbit would come as its dominant share of the fitness tracking sector continues to be chipped away by cheaper offerings from companies such as China's Huawei Technologies and Xiaomi.
Fitbit's fitness trackers monitor users' daily steps, calories burned and the distance they have travelled.
They also measure floors climbed, sleep duration and quality, and heart rate.
Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.
Analysts have said that much of the company's value may now lie in its health data.
Fitbit cut its 2019 revenue forecast in July, blaming disappointing sales of its newly launched, cheapest smart watch, Versa Lite.
The watch is priced at $160, compared with $200 for the full version.
It can track workouts and heart rate but lacks features such as the ability to store music directly.
In August, Fitbit said it had signed a contract with the Singapore government to provide fitness trackers and services, in a health programme which it indicated could reach up to one million users.
Fitbit in August also launched its latest smart watch, Versa 2, adding Amazon's voice assistant Alexa, online payments and music storage to the device.
Fitbit is scheduled to report third-quarter earnings on November 6.
Alphabet was scheduled to report third-quarter earnings yesterday.
Fossil Group said in January it would sell its intellectual property related to smart watch technology under development to Google for $40m.
Google's plans for these assets are not clear.