Google is buying Fitbit. The company officially announced the acquisition on its blog. The deal puts Fitbit under Google, not Alphabet, similar to how Nest is now organized. Google reportedly spent $2.1 billion on the fitness company.
Relatively speaking, this is a great landing for Fitbit. The company’s price has fluctuated significantly as it worked to adjust to a changing market and fumbled on some of its more recent launches. In summer 2015, it hit an all-time high of $51.90, but this August it went as low as $2.81 after more than two years hovering below $7 — a pattern that changed dramatically after the first reports of Google’s interest began to surface in September.
Google has struggled to make much of a dent in the wearables category. But wearables is still a young market, and at a time when Apple has been seeing its strongest category growth in the division that houses its own wearables effort, the Apple Watch, Google has never bowed out. In January of this year, the Android giant purchased a large chunk of IP from watchmaker Fossil for $40 million — a move that in retrospect looks like a setting of the stage for what was to come today.
While Google has also invested in a lot of its own in-house development, buying Fitbit represents a step-change and a bolt-on of years of effort focused specifically on the wearables category.