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Google’s parent company Alphabet Inc. is keen on acquiring wearable fitness device maker Fitbit though the figures aren’t known yet.
In what has been seen by many as a move into the fitness sector, Alphabet Inc. parent company of Google has been in talks with fitness device manufacturer Fitbit for the prospects of acquisition. Alphabet Inc. has been eyeing the wearable fitness device for some time and this could be a culmination of the innovative company’s intentions to get a slice of the fitness pie.
Sources familiar with the matter indicate that while Alphabet is already at par with other device makers in terms of devices such as smartphones, smart speakers and more recently earbuds it hasn’t quite been able to get into the wearable fitness device market and this could be one opportunity to do so easily.
Fitbit’s stocks went into a frenzy as soon as the news was leaked and trading in the stock had to be halted after an 18% spike. Stocks resumed trading and at the end of the trading day, stocks improved 30.5% and Fitbit ended up with a market capitalization of $1.5 billion.
While competitors such as Apple Inc. which recently released a new version of its smartwatch own around half the market share of smartwatches worldwide, Fitbit watches are cheaper in terms of cost and are aimed at a market that can afford to wear smartwatches without having the cash that for instance an Apple enthusiast would.
This also fits into Google’s strategy of “Ambient Computing” which puts together many parts to make up its ecosystem rather than have a single core element with every other thing revolving around it. In essence, an acquisition will give the Google ecosystem one more addition to the wonderful devices and software that Alphabet has currently put in play.
While Fitbit before now had to cut down revenue forecasts this fiscal year due to disappointing sales figures for its stripped-down Versa Lite Smartwatch with a $160 price tag as opposed to $200 for the complete version, the fitness device Company has fared better in terms of Corporate strategy as it indicated earlier this year in August that it had signed a contract to provide fitness devices to Singaporean Government Employees in a figure which could reach up to one million people and devices.
Also, with the introduction of Versa 2 which is compatible with Amazon’s Alexa, electronic commerce capabilities and music storage among other innovations, the wearable device maker seems like a good fit for what is easily one of the world’s greatest innovative organizations.
The talks with Fitbit, however, aren’t Alphabets’ only involvement with the wearable devices market. Already, Google’s Wear OS is used on Fossil devices. Fossil Group Inc. also announced early this year in January that it will sell its intellectual property involving wearable devices to Google for $40 million.
As at the time of writing this report no one yet knows the amount proposed to Fitbit and both parties haven’t made an official statement on the matter. Alphabet stocks increased $24.68 to $1,288.98 which is a 1.95% increase within the past 24 hours.