You’ll have to excuse my pessimism. I fully expect this to result in a total catastrophe for Fitbit’s employees, products, and customers. Just about everything Google has ever purchased has been discarded like garbage or has been completely devalued as a result of the company’s inability to successfully integrate acquired businesses into its culture.
Arguably, the first 10 years of Google’s existence resulted in mergers that were beneficial and necessary for building the company’s core services products, such as YouTube, AdSense/AdWords, Maps/Earth. However, its track record with acquisitions over the past 10 years has been awful. Especially if we consider significant capital acquisitions of $500 million or more.
NOVEMBER 2019, Google announces its intention to purchase Fitbit for $2.1 billion.
Fitbit has been struggling in recent years — with its health-focused tracking wearables — in a market with much more powerful and versatile smartwatches, such as the Apple Watch and Samsung’s Galaxy Watch, both of which sell much more capable products in similar entry-level price ranges ($199) with substantially larger application ecosystem support. The company’s weak sales of its Versa smartwatch prompted it to cut its revenue outlook in July 2019.
Fitbit is now part of Google
So, the big question is: Now what does Google plan to do with Fitbit?
Google already has a smartwatch operating system in the form of WearOS, formerly Android Wear. It’s not like the company couldn’t have launched its brand of smartwatch before — made by either an OEM or ODM partner, like Samsung, LG, or even Huawei, all of which have already launched WearOS devices in the past.
But the WearOS partner ecosystem has fallen apart. Developer support has been tepid, at best, and many users have complained of bugginess and poor performance. Google’s largest OEM partner in the Android ecosystem, Samsung, has abandoned WearOS in its Galaxy Watch devices in favor of Tizen, a much more resource-efficient and agile, open-source OS that is based on Linux.
Arguably, despite Fitbit’s dire financial outlook and weakening device sales that prompted it to be rescued by Google, the in-house designed OS that its product line uses is well-liked by its users and could be adopted by Google to form the basis of a Pixel smartwatch and other wearables, perhaps even an AR device like the failed Google Glass.
But questions remain: Does a “not invented here” mentality pervade Google?
Will WearOS continue to be developed in favor of Fitbit OS? Plus, there’s the issue of the continued WearOS investments by Google’s smartwatch partners. If WearOS development at Google ceases, then developers will abandon it entirely. That would look very bad for Google indeed.
And, if that’s the case, will Fitbit OS be open source or license to OEMs? It all sounds extraordinarily messy, and, ultimately, the consumers that invested in WearOS devices will get the short end of the stick if Fitbit OS wins the internal battle at Google. But it sounds like Fitbit is shaping up to be more of an expensive acqui-hire than it is an actual technology acquisition. So, Fitbit OS is probably over at least as an overall platform.
Fitbit’s current customers have also expressed concern because of Google’s loosey-goosey attitude toward privacy. They haven’t yet made a commitment to strong governance over their cloud-based health data. And how the company will use it after the acquisition. If I were a Fitbit customer, I’d be looking at Apple or Samsung’s products right about now.
I don’t think that Google has demonstrated either the hard or soft skills to properly integrate Fitbit into its culture. Which is toxic and is long overdue for internal disruption. But only time will tell.
Do you think the Fitbit acquisition will echo Google’s previous failed attempts to integrate their large purchases into their culture? Talk Back and Let Me Know.