Internet giant Google’s parent company Alphabet is supposedly in talks to acquiring one of the biggest wearables company, Fitbit, according to a Reuters Monday report.
As per the several sources familiar to the talks, Google has made a formal offer to the device manufacturer, but the deal is far from being finalized yet. The news comes one month after a report was published in September by CNBC, claiming that Fitbit officials were exploring a sale.
Following the news yesterday, the Fitbit stocks have risen about 30% in intraday trading. The Alphabet acquisition would add more value to Fitbit, which has been facing fierce competition from Apple and Samsung. Fitbit could also face potential competition from Google itself, in the fitness device space, as the company has been rumored to be working on a Pixel Watch.
Although the Versa line has helped Fitbit’s latest issues as the company has been reportedly struggling between its heavy dependence on basic fitness trackers and its gradual transition to services.
As most media speculations show, the acquisition may dramatically alter the smartwatch market worldwide. Currently, in spite of competition, Fitbit is still one of the largest smartwatch makers in the world, and the Google deal might help secure a global market. This could provide Google with market supremacy in a number of areas, including fitness tracking.
Google has been investing in the wearables market for several years, especially with its Wear OS operating system, but sources close to the company have said that the company has been continuously struggling to compete with the Apple Watch. This still happened in spite of support from established companies such as LG, Fossil, and TicWatch.
Rumors claimed that the internet giant had shown an interest in releasing a Google-branded Pixel smartwatch, and for that portion, a portion of HTC’s smartphone engineering team was bought back in 2017. At the beginning of 2019, Google concluded a $40million deal with Fossil for acquiring smartwatch technology but, 10 months later, it is still unclear what that technology was.