Google eats Fitbit, and it’s not just smart watches.


Editor’s Note: This article is from the WeChat public account “understand the notes” (ID: dongdong_note), the author Muzi, the editor Qin Yan, 36 氪 authorized to publish.Google’s parent company, Alphabet, has invested heavily in the acquisition of Fitbit.But the focus of future competition is fashion smart watches, or health management equipment?Recently, Google’s parent company, Alphabet, issued a statement saying it will acquire wearable device maker Fitbit for about $2.1 billion.After the news was released, Fitbit shares rose 16%, and Alphabet shares rose about 0.8%.As of Monday’s close, Fitbit’s market capitalization was $1.5 billion, an increase of $340 million from the previous trading day.According to the statement, the acquisition is expected to be completed in 2020.Accelerating the penetration of the health management market, analysts pointed out that this move indicates that Google and Apple will face a positive confrontation in the field of health management equipment.Data shows that at the time of the deal, Fitbit’s share of the fitness tracking market is being squeezed by companies such as Apple, Samsung, Huawei and Xiaomi.According to a survey by International Data Corp., Fitbit ranked fourth in the wearables market from April to June this year, behind Xiaomi, Apple and Huawei.Apple occupies the high-end market with high-priced products, and Xiaomi and Huawei occupy the low-end market with cheaper product prices and high cost performance.Google, which has been in the field of wearable devices, is always looking for a breakthrough in the field of smart wearable devices. It hopes to create smart watches and healthy hardware products that can be incorporated into its own ecosystem, and Fitbit can help it do this faster.”We believe that Google is the best fit.” Analysts at the well-known investment institution Craig Hallum pointed out in the relevant analysis report: “The rich health and fitness data, together with the 28 million active users on the Fitbit platform, will provide Google withGreat value.” Google hardware director Rick Osterloh posted a blog post about the acquisition of Google’s planned path to its smart watch software, Wear OS.Ostro said, “By working closely with Fitbit’s team of experts, we can combine the best artificial intelligence, software and hardware, and we will drive innovation in wearable devices and build benefits for more people around the world.Products.” Ostro stressed that Google will continue to focus on the operating system and ecosystem. “We plan to work closely with Fitbit to combine the advantages of both smartwatches and tracking platforms.” The deal is indeed in some respects.It has great significance for Google.Unlike Google’s own wearable brand, Android Wear, Fitbit has a higher brand awareness in the wearables market.Analysts pointed out that over time, Fitbit has shifted from fitness equipment for health enthusiasts to adding more medical features (such as detecting arrhythmias and sleep apnea), which are likely to help Google enter a value of up to $3.5 trillion.The field of healthcare.However, some analysts pointed out that after Google has mastered the data, it is likely to be used for the promotion of related advertising business.According to Google, these health and fitness data will not be used to directly advertise to users, which may be the key to the value of the transaction.Matt Stoller, an analyst at Open Markets Institute, a research firm focused on corporate competition and integration, said that the medical industry is one of the few companies that can help Google, a company that continues to grow in his view, for large consumer technology companies like Google and Apple, it’s important to gain a foothold in the wearables market because it’s the biometrics of humans that can capture user information and collect huge potential profits anytime, anywhere—The most critical route.The apple watch, which is difficult to shake, refers to Apple, and Google has long premeditated.Currently, Apple smart watches dominate the wearable device market, especially in North America.Alphabet, Samsung and even Amazon have been looking for ways to catch up for years.Although Google’s parent company, Alphabet, has an Android ecosystem, it has struggled on the “hardware” issue.Earlier this year, Google acquired a smartwatch technology division from the watch manufacturer Fossil Group.Fossil is now the main brand for producing smart watches on the Google Wear operating system.Since then, it has taken a more ambitious move to acquire Fitbit for $2.1 billion.However, even with Fitbit, Alphabet is still very difficult to beat Apple.Apple has a huge advantage in this area.After Apple introduced Apple Watch for the first time in 2015, wearables are already a core part of its business – in the fourth fiscal quarter ending September 30 this year, wearables was Apple’s fastest growing business unit.This technology giant has been committed to technical research and market development in new areas for many years, including the design of health management blood pressure and blood glucose monitoring technology.For Alphabet, wearables are an important position to bet on, but the business has never made a significant contribution to its overall performance.Alphabet’s health research organization is spread across the company, including subsidiaries such as DeepMind (Artificial Intelligence) and Verily (Medical Research).In essence, Google is still an advertising company — more than 80% of its revenue comes from advertising, and this business relies on collecting and storing user data.Although Google promises “will not use Fitbit Health Data to sell ads,” it may not be reassuring for consumers who are increasingly focused on online privacy.US Congressman David Cicilline has been the main head of Google’s antitrust investigation.Recently, Xixilin said in a statement that the acquisition will give Google an in-depth understanding of the most sensitive information of the public.”This proposed transaction is a major challenge to the anti-monopoly law enforcement’s willingness and ability to enforce the law. It will promote the concentration of competitive economic power and is worthy of a thorough investigation.” For more industry professionals with negative perceptions, the publicHealth data is an extremely sensitive area, because once data falls into the hands of “third parties,” it can be a disaster for consumers.In addition, Google has recently encountered some major challenges in how to use data from customers, including news that it uses Gmail to track purchases of data and is exposed by the media.In addition to the challenges of user data privacy, the issue of user retention after the acquisition is also a problem that Google must face.Although Fitbit, like many other wearable devices, has been trying to retain its old customers, data shows that although Fitbit sold more than 100 million wearable devices, the user size is only 28 million, which means itThere is a high rate of user churn, or a situation where users are deprecated.In fact, not only Fitbit, but even Apple is aware of this problem and has been actively addressing this challenge in health management wearables.In the future, technology giants focusing on health management will compete in a competition, including Huawei and Xiaomi, which have a large share of the corresponding technology market.The goal of competition is to develop a portable “health device” that really appeals to users..