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According to people familiar with the matter, Google parent company Alphabet has made an offer to acquire Fitbit, several reports said Monday. It remains unclear how much Alphabet offered to buy the company, and there is currently no confirmation that a deal will take place, but such a move would mark the entry of Alphabet into the wearable fitness-tracking space, competing against companies such as Apple, which recently unveiled a new version of its Apple Watch. Fitbit shares climbed as much as 30% on the news.
Google licenses its Wear operating system to companies such as Fossil, but does not currently produce its own smartwatch. In January, Google paid $40 million to acquire some kind of smartwatch technology from Fossil, although it is unclear what that technology was.
Meanwhile, Fitbit's Versa Lite smartwatch failed to meet sales expectations, resulting in it lowering its guidance for 2019. The company, which saw Apple seize about half of the global smartwatch market last year in terms of units shipped, recently launched its next-generation Versa 2 smartwatch that comes with "advanced health [and] fitness" features.
Earlier this month, Fitbit said it was partnering with the Bristol-Myers Squibb-Pfizer Alliance to address gaps in atrial fibrillation detection. Fitbit CEO James Park said at the time that his company has been working on its atrial fibrillation detection technology for "quite a while," and is also "in dialogue with the FDA to get that cleared and available to consumers."
Fitbit declined to comment on the Alphabet speculation, while the latter's chief financial officer would not discuss rumours of the potential Fitbit acquisition in an interview following Alphabet's quarterly financial report Monday.
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