Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

A Foolish Take: Google's Big Bet On Fitbit

By Leo Sun - Nov 11, 2019 at 12:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Can the tech titan rectify all its previous missteps in the wearables market?

Alphabet ( GOOG -0.87% ) ( GOOGL -0.68% ) subsidiary Google recently announced plans to acquire Fitbit ( FIT ) for $2.1 billion. The takeover would make Google the fourth-largest wrist-worn wearables maker in the world, but it still faces a tough uphill battle against market leaders like Apple ( AAPL -1.17% ).

Chart showing global market share of wrist-worn wearable devices in Q2 2018 and Q2 2019

Data source: IDC. Chart by author.

Google already owns Wear OS, but the smartwatch platform failed to gain enough developers and many of its hardware partners abandoned ship. It also acquired some of Fossil's smartwatch tech earlier this year. Google's purchase of Fitbit could pave the way for its long-rumored "Pixel Watch" to hit the market.

However, analysts expect Fitbit's sales to decline 4% this year as it falls further behind companies like Apple, which generated "strong double-digit growth" in Apple Watch sales last quarter, according to CFO Luca Maestri. It's also unclear whether Google will replace Fitbit's OS with Wear OS or the other way around.

Either way, Google could struggle to gain as many developers as Apple's WatchOS, and it still faces competition from other smartwatch makers like Samsung, which notably replaced Google's Wear OS with its own Tizen OS. In short, Google's big bet on Fitbit won't be its magic bullet for conquering the wearables market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,840.03 (-0.68%) $-19.29
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,850.41 (-0.87%) $-25.12
Fitbit, Inc. Stock Quote
Fitbit, Inc.
FIT
Apple Inc. Stock Quote
Apple Inc.
AAPL
$161.84 (-1.17%) $-1.92

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.