Google’s rumoured attempt to buy Fitbit won’t break the Apple Watch’s stranglehold on the wearable market anytime soon, but it could still be a clever move, according to industry experts.
Rumours Google’s parent company Alphabet had made a bid to buy Fitbit earlier this week, leading to speculation it may be looking at ways to grow its ailing share of the smartphone market using the iconic health tracking brand.
But global consumer insight director of Kantar, Dominic Sunnebo, told Trusted Reviews there is little chance of this happening in the near future.
“However you cut the data, Google’s push into Wearables cannot be deemed successful to date. Wear OS has less than 10% market share in the smartwatch market across Europe and the US,” he explained.
“The Apple Watch is currently without direct competition – whilst it may have started life with a focus on notifications and as an extension to the iPhone, it’s focus is now firmly on health and wellness. The health offerings are now as good if not better than the competition, whilst retaining and improving on the smart functions it initially excelled at. No one else is close to the rounded experience the Apple Watch offers.”
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“With the price of the Apple Watch 3 dropping to $199, Apple has effectively removed any chance the competition had of making progress amongst its iPhone base,” he said.
“Google’s opportunity comes from increasing smartwatch penetration amongst Android users – currently this lags well behind Apple, with just 6% of Android phone owners having a Smartwatch. This compares to 18% for Apple.”
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Despite the negative initial forecast, some analysts have suggested the move could have longer term benefits for Google and Fitbit that tie into Alphabet’s wider technology plans.
IDC senior research analyst, Francisco Almeida told Trusted Reviews he believes this is a pitch by Google to access to the wider healthcare industry, not just wearables hardware.
“This acquisition would not be a short-term bet on market share, it would be a long-term bet on healthcare. Fitbit has grown from a hardware revenue-based company in its inception to a powerhouse in the consumer segment with enterprise/government reach and a growing premium subscription base,” he said.
“But most importantly, Fitbit has access to a lot of data [and] a comprehensive product offering from the entry level to high end with a good in-app user experience across devices. The low end is perfect for new users and health initiatives that target a mass market audience, while the high end can target experienced users or simply allow users to upgrade.”
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He added the move would be doubly profitable as it would give access to Fitbit users data, which would help it improve it’s AI and machine learning initiatives around healthcare.
“Alphabet already has other divisions working on healthcare like Verily or DeepMind, whose health team joined Google Health, and has been hiring in that area […] Depending on how deeply Alphabet integrates Fitbit it should lead to an increase in market share which is necessary to enable future healthcare strategies from the customer facing side.”
Alphabet and Google have always used hardware as a means to gain access to user data, so it would make sense for the firms to have the same motivation when buying Fitbit, though this is currently just speculation as neither company has confirmed a potential acquisition deal.