Google is buying Fitbit and the reasons why are both simple and complicated. It’s the kind of big acquisition Google has done before (more money than YouTube, less than Nest or DoubleClick), but this one seems to have struck a particular nerve. My Twitter replies are currently filled with Fitbit customers promising to go buy Apple Watches right now. Whatever happens in the immediate aftermath, Google is going to have a big new team, a big new set of wary users, and a lot of big organizational issues to figure out.
In the short term, Google is clearly aware that Fitbit customers are going to be a little spooked. The company was sure to note that it will give those users “the choice to review, move, or delete their data” in the announcement post. Whether that will calm everybody down is a different matter.
But let’s start by answering the big, seemingly simple question: why did Google want to buy Fitbit?
It’s easy to overthink this one. In fact, I engaged in that kind of overthinking on Tuesday when the acquisition was only a rumor. The general reasoning is this: Google has a serious hole when it comes to wearables and it hasn’t been able to develop its own way out of it, so it needs to buy its way out. Fitbit is the best (some might say the only) available company that could fit the bill.
In short, Google wants to build smartwatch and fitness band hardware and Fitbit helps them do that more quickly. Badda bing, badda boom.
Simple, but not that simple. Is Google buying Fitbit to try to shore up Wear OS’s many issues? What could Fitbit provide that Wear OS really needs? You can spin yourself ‘round the bend worrying about it — and eventually Google will have to do just that. But in the short term, I think Google’s reasoning really is what it says: hardware chief Rick Osterloh wants to be able to make wearables inside Google’s hardware division, so he bought himself a wearables hardware company for $2.1 billion.
(As an aside: Google’s recent $40 million Fossil acquisition didn’t end up going into Google’s hardware vision, it was put under Hiroshi Lockheimer — who runs Android, but also Chrome OS and a dozen other software products.)
Google, like all tech giants, has bought a lot of companies. But unlike other tech giants, Google has had some high-profile acquisition fiascos. In fact, Rick Osterloh himself was collateral damage in one of the early messes: Google bought Motorola, squandered every opportunity it had with it, and eventually spun the whole thing off to Lenovo. Osterloh was the president of Motorola and lived through that mess — only to come back years later to lead Google’s newly unified hardware division.
So Osterloh knows a thing or two about Google mucking up a big consumer electronics acquisition. That might be why things seem to be going so smoothly with the HTC team, which Google bought in 2017. From the outside, the group is running on all cylinders and is kicking out phones — that team was completely in charge of the well-regarded Pixel 3A and now the Pixel 4.
It’s also worth noting that the deal’s not done yet, and US regulators might well decide that it’s time to stick it to Google. The company will probably argue that the wearables market is still highly competitive: Samsung, Garmin, Xiaomi, and even Huawei all make competing devices, to say nothing of Apple. That’s not an argument that’s likely to convince the new wave of antitrust advocates, but actual regulators tend to be a much easier sell, so it seems like they will revert to their recent norm and let it go through.
But if Osterloh can navigate integrating Fitbit into his team as well as the HTC integration has gone (and let Pichai manage whatever comes out of the Department of Justice), we could start seeing the fruits of this acquisition surprisingly soon.
But integrating Fitbit is going to be much more complicated than integrating HTC. Fitbit offers services to customers, and those services will have to be maintained throughout the process. Fitbit also has several overlapping software platforms and a wide array of different products to support. It has a huge user base and new watches it literally just released, which customers will expect to be able to keep using for years to come.
None of those challenges were in play with HTC. That’s why, to my eye, the Fitbit acquisition looks a lot more like another Google hardware purchase: Nest. Unfortunately, that was another one of those fiasco integrations.
A brief history: Nest came on in 2014 as a division of Google. Integrating two company cultures is always difficult, but executives didn’t make it any easier by buying Dropcam and folding it into Nest right away. Then the next year, Google decided to break itself up into a bunch of little companies under the Alphabet umbrella — but there was and will always be the one big company called Google. Nest bounced around as an Alphabet division for a while, the pressures of which led directly to its CEO Tony Fadell bailing in a high-profile exit in 2016. Then Nest rejoined Google under Osterloh in 2018. Now it is Google’s brand for all its smart home products and finally has gotten back to releasing new devices on a somewhat regular cadence.
Also, somewhere in there Nest released a home security system and forgot to tell everybody it had microphones in it. Oops.
All of that sounds awful and there are many, many circumstances that applied to Nest that won’t apply to Fitbit. But the core issue for both companies is that they were vertically integrated hardware and software companies before they were bought, and Google will need to figure out how (or even whether) to tease those things apart.
Merging company cultures is one thing. Merging company cultures while simultaneously trying to decide how to split up and merge different technologies into your own systems is another thing entirely. Doing all that while not forgetting to do the right thing by Fitbit customers is going to be a very big challenge.
And all of this is only looking at this acquisition in terms of what it means for Fitbit and Google’s hardware division. There’s also the question of Google Fit, the company’s health software offering. There’s also Wear OS.
Oh, Wear OS. I have spent many months kicking Google’s smartwatch platform when it’s been down — and it has been down a lot. One of the things that initially baffled me about this Fitbit purchase is that I didn’t see how it could help Wear OS with its biggest problem: Google couldn’t replicate the Android model of many manufacturers driving adoption, which then drove processor innovation.
The answer is that Google didn’t buy Fitbit to solve that problem. Google is still working to solve it directly — and, at the same time, reassure hardware partners it will still support them even though it’s going to start competing with them directly. In a separate post, Google’s VP of product management for Android, Google Play, and Wear OS, Sameer Samat, wrote this:
We’re looking forward to collaborating with Fitbit to bring the best of our smartwatch platforms and health applications together, and enabling our partners to build the next generation of wearables.
I have no idea what that “collaboration” will look like and I sort of suspect that Google isn’t fully sure either. In fact, I wouldn’t expect to see anything substantial for at least a couple years.
In the meantime, Google needs to close this deal and — more importantly — it needs to go all-out to do everything it can to help and support Fitbit users. People love their Fitbits and the data Fitbit has on them is incredibly intimate. Google whiffed when it communicated changes in the Works with Nest program — it absolutely can’t afford to whiff when it talks to people about their health data.
There’s another version of this story where I would have spent many paragraphs talking about how it’s impossible to make great smartphone accessories when the platform access you really need is so restricted — especially on the iPhone. I would look at Fitbit’s efforts to succeed in the smartwatch space despite those limitations and how they were a continuation of Pebble’s own struggles to do the same thing. I would say it would be a damn shame if Google’s acquisition ultimately led to less smartwatch competition for Android users. I think Google sincerely doesn’t want to do that, but that doesn’t mean it wont happen.
Finally, I am bummed about this acquisition in the same way I was bummed when Amazon bought Eero. With Eero, it was the dawning realization that it is very hard to scale up an independent hardware business without a massive corporation to subsidize your efforts. With Fitbit, it’s that same feeling — but with the added ennui of remembering that inside Fitbit are the remains of another innovative but failed startup: Pebble. Now Pebble is inside Fitbit, which is inside Google hardware, which is inside Google, which is inside Alphabet. It’s a nesting doll of how tech works in 2019.