Google (GOOG) has agreed to acquire wearable technology company, Fitbit, in a deal worth approximately $2.1 billion. The purchase of Fitbit (FIT) gives Google some real firepower in the fight to take-on industry leaders like Apple (AAPL), which has dominated the wearable space ever since the release of its Apple Watch in 2015.
“It's less of a hardware play on the trackers and on the smartwatches but really a data play... Google will now have information on not only the temperature of my house, to the extent I've got four Nest thermostats or whether or not I have a smoke alarm going off or things like that, they'll know, in fact, how much I move on a given day, how many steps I take, things of that nature,” D.A. Davidson analyst Tom Forte told Yahoo Finance. “This is very interesting data for Google. And if you think about Google's efforts, again, Amazon with Alexa and Apple with its various devices, they're all just collecting data for consumers. But this helps round out the data set for Google, given that it gives you, again, health care-related data.”
Russell Holly, managing editor of Android Central, said we can also expect Google to use its software to make the Fitbit operating system a lot smarter, but it will be quite some time before it’s capable of competing with the likes of Apple.
”By acquiring this company, it has access to a tremendous amount of health and fitness data that it can use to improve its own products and produce new ones that are hopefully going to continue to drive that Fitbit brand as something that is and remains competitive in this market,” said Holly. “Apple is more than a market leader in this place. It's a market dominator. And in order for Google to make any kind of changes to continue to make Fitbit competitive, that's going to be something that we don't see for at least two years,”
Data is the new oil
Google’s entrance into wearable technology raises new questions about user privacy and its unrivaled access to personal data. For its part, the company addressed the issue in its latest press release, promising not to sell Fitbit’s health data or use it for advertising.
“Similar to our other products, with wearables, we will be transparent about the data we collect and why. We will never sell personal information to anyone,” said Rich Osterloh, Google senior vice president of devices and services, in the post.
Still, this doesn’t help Google’s case as it contends with increasing scrutiny from a Congress that’s being pressured to rein-in the titans of Silicon Valley. Calls for the government to run interference are growing louder as Google creeps further into our personal lives, said Forte, adding that it can be a bit scary from a consumer protection standpoint.
Nick Rose is a producer for Yahoo Finance.