Google Fitbit – Moot point.

The fuss around Fitbit data is moot.

• The inevitable (see here) acquisition of Fitbit by Google is creating a fuss around user wellness data but the reality is that Google, to all intents and purposes, already had it.
• The news is full of users abandoning their Fitbit devices and deleting their accounts as they do not want their wellness data to be analysed and tracked by Google.
• I suspect that these anecdotal stories are not representative of reality and that the vast majority of users do not care one way or the other.
• This is evidenced by the fact that if the news stories around Facebook represented reality, its financial performance would be in meltdown when in fact Q3 19 (see here) demonstrated precisely the opposite.
• However, these disgruntled users are probably not aware that their data has actually already been with Google for some considerable time.
• It was this fact that led me to believe that an acquisition by Google at some point was inevitable (see here).
• About 18 months ago Fitbit entered into an alliance with Google where it would use the Google Healthcare API to access the healthcare system and make the data accessible by doctors and hospitals.
• Fitbit also moved all of its operations onto Google Cloud which allowed it to scale more quickly as well as have access to Google’s best in class AI systems.
• This effectively marked the end of any ecosystem ambitions that Fitbit might have had and is exactly what it tried so hard to avoid when it declined to use Apple’s HealthKit API.
• RFM research has long shown that when different pieces of independent but related data are put together, far better insights can be gleaned, making data in aggregate far more valuable than the sum of the individual pieces.
• This is the value that Fitbit conceded to Google and why I held the view at the time that this marked the end of any real value that Fitbit may have been able to create for its shareholders.
• The net result was that Fitbit went from being a potential aggregator of wellness information to merely a provider of data that is aggregated and understood by Google.
• This was a win for Google in its efforts to compete with the Apple ecosystem which eventually led to Fitbit’s acquisition because it was too small to survive on its own.
• It is clear that Fitbit will now adopt Android Wear right across its range, but I suspect that the very low-end trackers may well stay on their current RTOS and move to Fuchsia when it launches.
• I suspect that this also means that Google will launch with a Fitbit branded device, in an attempt to take on the dominant Apple Watch.
• To get the optimum performance, the user will need to be fully committed to the Google ecosystem of hardware products (like Apple Watch) and the issue here is that very few users are.
• Even then, I suspect users will be asked to pay Apple and Samsung prices which will also serve to dissuade users.
• The net result is that Apple will be losing no sleep at all over this move and may even see a few new users as a result.
• Given Alphabet management’s apparent disdain for hardware, I suspect the long-suffering Dr. Porat will be signing away another $2.1bn with gritted teeth.