Patent investment predicts market activity, and Google’s recent acquisition of Fitbit is no exception.
Google announced on November 1, 2019, that the company entered into an agreement to acquire Fitbit for a reported $2.1 billion. Google’s Senior Vice President of Devices & Services, Rick Osterloh, stated in a blog post that the acquisition is “an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.”
Magic Number predicted earlier this year that Fitbit would be acquired based on the patent data. In a first post in March 2019, Magic Number noted that Fitbit was strategically positioned in the sleep tracking market, making the company attractive to Apple, which is looking to implement sleep technology into the Apple Watch by 2020. In a second post in August 2019, Magic Number noted Fitbit’s pivot to focus on overall health in an effort to compete with Apple and stated that Fibit may eventually be acquired by a larger company, such as Apple or Google’s parent company, Alphabet.
Because patent ownership gives the right to exclusivity, companies generally either build their own patent portfolios or buy another company’s portfolio. In a post last week noting Alphabet’s rumored acquisition of Fitbit, Magic Number noted that Fitbit is the largest assignee in the Consumer Sleep Technology sector, with 156 documents in the Data Processing & Analytics and Sensors categories. In contrast, Alphabet only has 7 documents in the sector and Apple only has 28 documents in the sector, with all of those documents for both companies in the same two categories. Given Fitbit’s large patent portfolio and the competitive wearable market, the patent data indicated that either Alphabet or Apple would likely acquire Fitbit. Whether Google’s acquisition will take a bite out of the Apple remains to be seen.
Fitbit (Teal) has shown significantly more activity in the Data Processing and Analytics side of Consumer Sleep Technology space than Google (Red), and Apple (Black) since 2013.
