in , ,

Fitbit shares suspended on Google takeover announcement

fitness


Shares in fitness device maker Fitbit were suspended on Monday after a report said Google had bid to buy the firm.

Reuters reported that the companies were in negotiations but no deal had been agreed.

The move would enable Google to produce its own smartwatches. It already develops a version of Android for wearables.

Fitbit’s share price increased by 19% before being suspended. Google has not commented.

A spokeswoman for Fitbit said it “does not comment on rumours or speculation”.

Reuters did not say what sum had been offered.

It emerged in September that Fitbit, currently valued by the markets at around $1.4bn (£1.1bn) after Monday’s surge, was touting itself for a sale.

Fitbit, which in its latest quarterly earnings posted a loss of $68.5m, is looking precarious as a standalone entity since bigger firms have gained a strong footing in wearable technology.

“A key tipping point is likely to have been Apple’s decision to price its Series 3 Apple Watch at $199/£199,” said Leo Gebbie, from the consultancy CCS Insight.

“That will have put immense pressure on Fitbit’s own products, which are already feeling the challenge from low-cost rivals such as [China’s] Xiaomi.”

In an attempt to diversify its income, Fitbit has expanded into other areas – including monitoring users’ breathing during sleep, and diabetes management.

But the firm trails Huawei, Apple and Xiaomi in fitness tech sales.

For Google the deal, if confirmed, would represent a renewed effort to develop its Wear OS platform.

“Although Google has been lukewarm in its commitment to wearables recently, this indicates it is serious about the segment and could provide a strong boost to its ambitions,” Mr Gebbie added.

CCS Insight predicted 142 million wearable devices would be sold worldwide this year, at a value of $17.1bn.

Meanwhile, Google’s parent company Alphabet released its third quarter results which showed a drop in net profit to $7bn in the three months to 30 September. Analysts had been expecting profit of $8.8bn.

It fell from $9bn in same period last year when changes to US tax law had boosted Alphabet’s bottom line.

Total third quarter revenue rose by 20% to $40.5bn.



Source link

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

will-i-am

Will.i.am tech company running out of money leaking staff unpaid

Finalists announced in the 2019 Natwest Everywoman Awards

Finalists announced in the 2019 Natwest Everywoman Awards