After years of rumors that Google will launch its own smartwatch, the company has purchased Fitbit for $2.1 billion. The acquisition comes at a time when Google is investing in medical projects, and the decision to invest in wearables may be about reaching everyday consumers as Google continues to look for ways to get involved in healthcare—while also conveniently helping the search giant compete with Apple on hardware.
In the years since fitness trackers have come on the market, they have been more of a tool for already healthy people, rather than a force for rallying the more sedentary among us. Still, the market for wrist wearables is growing and Apple is the leader by a fairly wide margin. Fitbit’s fitness trackers and smartwatches make an interesting addition to Google’s hardware lineup, which ranges from smart speakers to glossy phones and laptops—but not just because Google can now more directly compete with the Apple Watch. More recently, the company has made a foray into health technology and is developing software for doctors and consumers. In theory, a smartwatch might help the company marry its hardware to these health tools. But in connecting hardware to health, Google, which is still an ad business at its core, will have to answer hard questions about how it plans to handle consumer biometric and health data.
Wearables are dead. Aren’t they?
Smartwatches have had a rocky history, so much so that people started heralding their death five years ago. It’s unclear whether these devices really make us healthier. Studies have shown that fitness wearables tend to be worn by people who are already making healthy choices in their lives. Data also indicates that wearables don’t help people lose weight—coaches and nutritionists do. Another survey, from 2014, revealed that most people get rid of their wearables after six months anyway. There was also promise that collecting daily activity metrics like heart rate could somehow help doctors advise patients, but so far most doctors haven’t been able to meaningfully incorporate them into their practices.
Whether or not these devices are effective at changing behavior, insurers are still eager to get them on their customers. Humana gives a portion of its customers access to Fitbit’s coaching platform as a way to incentivize healthy behavior (and hopefully lower its own cost of paying for chronic illness). In general, the market for wrist wearables is up 29% from last year, according to research firm IDC.
Wearables have only grown in sophistication as well: The latest Fitbit, the Versa 2, has sleep tracking, heart rate detection, GPS (when connected to Wi-Fi), and Alexa. Fitbit also now has a subscription service for fitness advice along with coaching. But even with all these features, reviewers of the Versa 2 have given it the equivalent of a shrug. The consensus seems to be that even with features like sleep tracking, it is not as good as the Apple Watch for the money. Apple shipped 9.7 million of its watches in the first half of the year, and IDC estimates the company will comprise 38.9% of all smartwatches shipped in 2019 by year’s end. Conversely, Fitbit’s growth has slowed considerably. Fitbit was once valued at almost $10 billion, then it entered the public market at $4 billion, and now it is being sold to Alphabet for $2 billion.
Google Health, smartwatches, and beyond
Google’s Android watch operating system has been around for five years and is used by Samsung and Motorola among others. But the company has never had hardware of its own. For years there have been rumors that the company is on the precipice of launching its own watch. Then, this year, the company bought Fossil’s smartwatch team, Misfit, for $40 million. Now, with Fitbit, its watch again seems imminent.
“Fitbit has been a true pioneer in the industry and has created terrific products, experiences, and a vibrant community of users,” Rick Osterloh, head of hardware at Google, said in the prepared statement. “We’re looking forward to working with the incredible talent at Fitbit, and bringing together the best hardware, software, and AI to build wearables to help even more people around the world.”
In addition to making its mark in the smartwatch category, Google has big ambitions to get into health more broadly. When it hired Geisinger Health’s CEO David Feinberg last year, Google focused its mission on bringing its search capabilities to electronic medical records and other places it might be useful in healthcare. There are also other health projects inside the wider Alphabet umbrella, including research-focused Verily, biotech arm Calico, and the AI lab DeepMind. But these projects are largely aimed at researchers.
At the consumer level, Google mainly has its health tracker Google Fit. But another recent purchase shows Google has ambitions that go beyond the wrist. Earlier this year, Google’s smart home subsidiary Nest acquired a startup called Senosis, which built a series of novel apps for measuring health metrics like hemoglobin count. That Google chose to fold the startup into its connected home division suggests it may be thinking about designing a range of health-oriented connected devices for the home (think smart scales and baby monitors).
Home health devices can probably deliver enough value for consumers on their own, but the holy grail for any tech company flirting with healthcare is to be able to connect to doctors. Google’s health division has already started to forge partnerships here, though Apple may be slightly ahead as far as smartwatches are concerned. Since launching the Watch, Apple has matched watch wearers with health studies and devised kits to help incorporate its data into health center apps.
“Apple has done a pretty good job creating pathways to integrate data from their device with hospital systems,” says Dan Durand, the executive director of innovation at LifeBridge, a healthcare company in Maryland. “It’s possible [Google] is trying to be competitive with that.” Apple has harnessed its customer base for involvement in research studies. It has also worked to ingratiate itself with the medical community through collaborating with academic medical centers and organizations like the American Health Association and the American College of Cardiology. Google also has relationships with prominent health centers and organizations, though they are built on search rather than hardware.
What about the data?
There are some hurdles to connecting consumer health devices to the doctor’s office. For one, it’s still unclear how doctors would actually make use of wearables outside of a research context. Another big question is how good the quality of the data is. Part of the reason doctors often can’t use data collected from mobile phones and smartwatches is that none of it is standardized.
“If Apple has its own way of tracking and Google has its own way of tracking and they’re only working in their own ecosystems, that’s okay,” says Steve Wretling, CTIO of HIMSS, a nonprofit organization that provides resources to healthcare centers around data management. If these companies want to help doctors make diagnoses, everything about the data will have to be standardized. “Without standardization or a basic trust level it’s going to be difficult,” he says.
Wretling gets at one other issue Google may have to grapple with as it delves into smartwatches: trust. The company has a reputation for mining every bit of a person’s online activity, though in this case Google has promised it will not use health tracking data in its ad targeting. Still, some, like lawmaker Katie Porter, are concerned about Google’s ability to appropriately handle health data without legislators providing clear guidelines.
The reality is, with or without a smartwatch, Google already knows a lot about your health based on your searches. The use of Google Search as a health tool alone should raise questions about whether the collection and storing of that data should be regulated. As Google adds health devices to its product lineup, the scrutiny is only likely to increase.