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As Roku extends CTV lead, Google gorges on Fitbit wearables data

Alphabet’s Google is buying Fitbit for $2.1 billion, in a move reminiscent of how Google was forced to buy Motorola Mobility and then a good chunk of HTC in order to create the Android flagship devices needed to best showcase Android. However, unlike HTC, Fitbit doesn’t use the Android operating system, which presents something of a conundrum.

The Moto 360 smartwatch was meant to be the direct rival to Apple’s Watch, with Google owning Motorola. However, while a few other Android Wear advocates emerged, Samsung pressed ahead with its own Tizen platform. Meanwhile, the bottom fell out of the market, massively undercutting the prices being charged by these Android and Tizen types, while Apple went from strength to strength – selling into an entrenched and sticky customer base that had plenty of disposable income.

One take could be that with Roku charging ahead in the connected TV space, leaving Chromecast in the dust despite impressive sales figures, Google is reemphasizing its wearables approach and has paid a premium for the privilege.

Fitbit was always somewhat unperturbed by Android Wear. It had settled on its own operating system and software, and chose to interact with Android via the Fitbit app, rather than through native integrations. To this end, it was never having to be a trendsetter or play catch-up, and could choose to focus on competing with its main rival Garmin – in the fitness tracking markets that also suffered from bargain-basement price incursions from no-name Chinese brands.

Collectively, it has been a difficult few years for the wearables market. There are still very few killer apps, and the most pressing is fitness-focused – with enthusiast runners very attached to their workout and route trackers. Elsewhere, the Apple Watch presents many nice-to-have features, which cumulatively add up to a much-liked user experience – facilitating payments, controlling notifications from the iPhone, fitness tracking, and direct control over certain phone functions, like media playback. Apple couldn’t charge $300 for one of these features in isolation, but their value adds up to that price tag.

In this regard, Android has lagged, and this is largely due to the fractured developer ecosystem. Apple retains complete control over how the Watch interacts with the iPhone, and its developer programs and App Store ensure that features are added in a safe cadence – and nothing risks damaging the user experience. In the Android ecosystem, there is no such collective front, and each brand is essentially left to its own devices – reskinning Android, perhaps contemplating a smartwatch, working out how aggressively non-Google their apps could be.

All of this would have greatly frustrated Google. It was clear that buying Motorola and then HTC was an attempt to create the ‘pure’ or ‘native’ Android experience on a smartphone, sold at competitive prices on the key selling point that this was how Android was meant to be – that this was the best version of an Android phone you could buy.

With the success of the Pixel line up, Google has been able to force the hand of the biggest Android smartphone makers. The UI these days, across the industry, is more uniform, and closer to the AOSP elements that form the basis of Android. Of course, Google would insist that you include its Google Play suite on top of this, and while many have their own takes on these apps and services, most have stuck with Google. Huawei has been forced to seek alternatives.

So, on the surface, it seems clear that Google is trying to do something similar with Fitbit – buying the leader in the non-Apple smartwatch segment, and trying to bring the rest of the industry round to how a wearable would augment the Android experience. However, as we touched on above, Fitbit does not use Android Wear.

This means that Google either focuses on how Android should interface with non-Android wearables, and standardize around that process, or that it tries to completely overhaul the Fitbit portfolio to create new Android-powered devices that then natively integrate with Android-powered smartphones.

The former seems less difficult, and less intrusive to Fitbit. At $2.1 billion, it would likely be more affordable to develop a Pixel Watch in-house, if the latter was actually the plan, especially as Google has such sway over the Wear OS design and experience. This might also be a sign that Wear OS is now properly on the backburner, although Google would never admit to this. If the focus proves to be on how to interface with non-Android wearables, that would be a clear sign that Google thinks Wear OS is beyond saving.

So then, the ulterior motive is almost certainly all the health data that Fitbit has collected, and all the happy customers that might prove to be willing participants in an expansion into the healthcare industry. Google has a clear interest here, with its Verily division the best evidence, but more importantly, chief-rival Apple has made inroads into the health sector, and Google wants to ensure that Android does not miss out.

To this end, flagship devices are pivotal, as the healthcare sector is extremely risk-averse, and no-name generic Chinese devices are going to raise hackles. With 100 million devices sold, Fitbit has great sway in this data-gathering initiative, but whether it could convince users to sign up to a Google scheme depends on how savvy Google’s PR and marketing is.

Apple continues to stress the whole privacy angle in its promotions, and Google has to be careful here. In the announcement, Fitbit was quite pointed in this regard, saying that “consumer trust is paramount to Fitbit. Strong privacy and security guidelines have been part of Fitbit’s DNA since day one, and this will not change. Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why. The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.”

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