3 Reasons Why Google Acquired Fitbit For Rs 15K Cr (#2 Is About $3.5 Trillion Health Care Market)
Google has decided to shake up the wearable and fitness tracking tech niche, in a big way.
In a decision which will have long term implications for the entire industry of wearable market, Google will acquire Fitbit for $2.1 billion or Rs 15,000 crore approximately.
Google’s parent company: Alphabet, will now officially the owner of Fitbit, as they will pay $7.35 per share, which will value Fitbit at $2.1 billion.
This acquisition will be over next year. Share market has reacted positively to the news, and the share prices of Fitbit surged by 16%, whereas Alphabet’s share prices increased by 0.8%.
What are the reasons behind Google’s decision to spend Rs 15,000 crore for acquiring Fitbit?
Critical Data About 30 Million Users
Fitbit, which was founded in 2007, boasts of 30 million users, and have sold more than 100 million devices till date.
These devices hold critical data about the users, and as per some analysts, this can be the biggest reason why Google will spend Rs 15,000 crore for acquiring FItbit.
Although Fitbit has categorically denied that their data will be used by Google for placing their advertisements, but it is clear that data is the catalyst here.
Google must have rationalised the spending of $2.1 billion or Rs 15,000 crore with the fact that now, Google owns one of the largest repositories of live, dynamic health data, which is constantly being updated. In real time.
Target: $3.5 Billion Healthcare Sector
Globally, healthcare is a $3.5 trillion market, which will only grow with time. And this acquisition of Fitbit by Google clearly showcases that they are now aiming for a big slice of this market.
In the last few months, Fitbit has started shifting their focus from fitness tracking to a more hardcore health solution applications. Like in June this year, they formulated a blueprint for detecting cardiac arrhythmia and sleep apneab among their users.
More such initiatives are planned, and Google is clearly aware of this. Now, when combined with critical health data about users, and empowered with tools which can detect diseases as well, Google can become a major force in the healthcare sector.
Battle Against Apple Intensifies
Once upon a time, not too long ago, Fitbit was world’s #1 wearables company. And then came Apple and Xiaomi, and everything changed.
As per the latest wearables market stats, Apple is #1 company with 27% share, followed by Xiaomi, Huawei and then at #4 position, is Fitbit with little more than 9% market.
Fitbit know that they can’t fight against Apple, which is world’s largest, most powerful tech company.
But Google certainly can.
Now, the battle between Apple and Google becomes even more interesting.