Google has announced a deal to buy Fitbit, the wearable electronics maker, worth $2.1 billion. The deal was announced after it was halted in the early hours of Friday morning, and negotiations over the deal have been going on for a long time. Fitbit cut its full-year revenue forecast in July. At the time, it mentioned that Versa Lite was not doing well in the face of anonymous competitors, possibly the Apple Watch.
Many analysts say Fitbit’s value is more about user data than hardware. The company has been trading with insurers to tie products to insurance plans and is trying to boost revenue in a crowded, low-end fitness tracking market that is increasingly being squeezed by the Apple Watch.
The company launched its new Versa 2 for mid- to high-end locations in August, which is closer to the Apple Watch, adds Alexa Assistant support, and includes near-field communications for online payments and storage of music and user media content on devices. The Versa 2 retails for $199, while the Apple Watch Series 5 starts at $399, but the Apple Watch Series 3 also sells for $199, which is more fully functional than the Versa 2.
Fitbit’s quarterly revenue will be announced on November 6. Google’s offer is $7.35 a share in cash, and the deal is expected to close in 2020.