HUM - Is It Smart for Alphabet to Buy Fitbit?
Google's parent company Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is looking for its way into the wearable technologies market. Alphabet has reportedly made fitness-smartwatch maker Fitbit (NYSE: FIT) an offer to acquire the company. Details on the offer have not yet been made public. Fitbit may be open to the idea, as the company engaged investment bank Qatalyst Partners last month about the possibility of selling itself.
Apple (NASDAQ: AAPL) has consistently dominated the smartwatch space and it has the revenue growth to show it. Apple has 46.4% of the market share of smartwatches. Within minutes of the report of Alphabet's bid to buy Fitbit being published, Fitbit's stock grew 38% and Alphabet's stock grew 2%. If Alphabet acquires Fitbit, it will be its first time in the smartwatch space and the deal could result in great returns for investors.
Google previously worked with other companies on smartwatches that run on its software, but the company has yet to establish a dominating presence in the wearable technologies space through its own branded products.