BREAKING NEWS: Fitbit For Sale, Is Google A Buyer?
Fitbit who have had a lot of success in the Australian market has called in the investment bankers with speculation mounting that the wearable device maker is up for sale.
At retailers such as JB Hi Fi, Harvey Norman, The Good Guys as well as at the likes of Big W the Fitbit range of products are seen as “regular sellers” particularly with female shoppers, however the Company has struggled to crack the smartwatch market that is dominated by Apple and Samsung.
According to Reuters the US Company has called in investment bank Qatalyst Partners about whether it should engage with potential acquirers, sources said.
Tupped to be among the potential buyers are Alphabet the owners of Google as well as several private equity firms who believe that the Fitbit brand name has added value.
At this stage Fitbit has not yet decided to pursue a sale and there is no certainty it will do so, sources said.
Reuters claim that Fitbit has struggled to gain a foothold in the smartwatch category, because of the strength of the Apple and Samsung brands in the that are also seen as having more sophisticated devices due in part to their dominant position in the smartphone market, this has allowed them to connect the two devices, smartwatch and smartphone using proprietary software.
At the same time, Fitbit’s dominant share of the fitness tracking sector continues to be chipped away by cheaper offerings from companies such as China’s Huawei and Xiaomi.
Fitbit and Alphabet said that it is their policy not to comment on rumours and speculation. Qatalyst did not respond to a request for comment.
Fitbit shares rose 22% to $4.48 on the news, giving the company a market capitalization of more than $1.1 billion.
Fitbit cut its 2019 revenue forecast in July, blaming disappointing sales of its newly launched cheapest smartwatch Versa Lite. The watch is priced at $249, compared with the $329 the full version sells for. It can track workouts and heart rate, but lack features such as the ability to store music directly.
Fitbit’s fitness trackers monitor users’ daily steps, calories burned, and distance travelled. They also measure floors climbed, sleep duration and quality, and heart rate.
Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.