Alphabet Inc (NASDAQ:GOOGL) Leaps Into the Wearable Industry By Buying Fitbit Inc (NYSE:FIT) For $2.1 Billion

Alphabet Inc (NASDAQ:GOOGL), the tech giant that helped make it fun to sit around surfing the web, is leaping into the fitness-tracker market by buying Fitbit Inc (NYSE:FIT) for about $2.1 billion. This deal will put the California-based Corporation in direct competition with Samsung and Apple Inc. (NASDAQ:AAPL) in the highly competitive market for smartwatches and other related wearables.

This might shore up the ranking of Google’s wearables in the short-term, and probably bring better retail experience to the company’s world. However, it will not solve Google’s primary problem as attempts to prevent Samsung, Huawei,, Inc. (NASDAQ:AMZN), and Apple from taking Android’s rank in the post-smartwatch market.

Sure, the smartwatch is a booming industry, and Google’s Android is thriving there. Google’s Chromebook is growing on laptops, according to Statista. However, these are somewhat mature categories.

Will buying Fitbit solve Google’s core problem?

Should Google be a first-party hardware maker or a neutral platform provider? Right now, consumers have access to wearables, smart speakers, and wearables. However, Google seems to be far from dominating any of the upcoming categories.

It’s no doubt that most consumers love their Google Home, but Amazon is crushing it in the United States in terms of smart speaker sales. Besides, Alphabet Inc.’s purchase of Nest doesn’t appear to have changed the situation. According to Statista, Apple boasts of about 50% of the market share of hearables, with Samsung being the next player.

The privacy concerns                                         

So, where is growth coming from within the next few years? Just think about it; Google focuses on ubiquitous computing – putting Assistant on nearly everything, processing data, and returning relevant answers. Thus, Google is a data-focused business, and the more techniques it has to acquire data, the better it performs.

Alphabet Inc.’s move also raises concerns about privacy and the company’s dominance in the tech industry. However, Google’s announcement last Friday came with a promise that it will never sell ads using the specific health data collected by Fitbit devices.

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Published by Ruchi Gupta

Swati Goyal has over 6 years of experience in financial research & analysis domain. She has built financial models varying from consumer goods to banks. She has her articles published in leading dailies of the nation

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