Fitbit buy is Google’s latest step into gadgetry

Updated 03 November 2019

Fitbit buy is Google’s latest step into gadgetry

  • Health and fitness wearables like the ones that made Fitbit famous are just one more avenue for Google to forge a presence in people’s lives
  • Google’s last big acquisition-fueled push into a hot hardware space involved its takeover of smart-thermostat maker Nest

NEW YORK: Google’s acquisition of wearable pioneer Fitbit may be a bold plunge into health and fitness technology. But it is also just the latest step in the internet giant’s often-halting effort to become a force in consumer hardware.

Once a pure software company known for its search engine, apps like Gmail and its Android software for smartphones, Google has for the last several years been building out its own suite of hardware products. These include its niche Pixel smartphones and a variety of smart gadgets from speakers to thermostats to Wi-Fi routers, all recently rebranded as “Nest” products.

Last month, the company announced a slate of new products including a Pixel phone, a Nest speaker and wireless earbuds. But its gadget sales are still minuscule compared to rivals Apple and Samsung.

That does not necessarily matter much to Google, which sees hardware mostly as a way to get people hooked on its software and artificial-intelligence (AI) services. Health and fitness wearables like the ones that made Fitbit famous are just one more avenue for Google to forge a presence in people’s lives.

Google has previously tried and failed to build a business in health technology, and its Wear OS software offers fitness tracking and AI for smartwatches made by other companies. But it does not have its own branded fitness wearable. That seems about to change.

FASTFACT

$8 billion

Digital health is a fast-growing market, with one study tracking more than $8 billion in venture investment in 2018.

Although Fitbit has been struggling recently against amped-up competition from Apple and Samsung, it still has one of the most recognizable and trusted brand names in wearable health tech, said eMarketer analyst Victoria Petrock.

“I think this gives Google immediate credibility in the market,” she said.

In a blog post announcing the deal with Fitbit, Google hardware executive Rick Osterloh said the merger would give the company an opportunity to release its own wearable device.

Google is realizing that it needs to build products that are consistent and coherent, like Apple does because it makes both hardware and software, said Forrester analyst Frank Gillett. He said Microsoft is taking steps in this direction as well with the Surface.

“The Android model has been successful to a point, but it has also created a fragmented user experience,” Gillett said.

Google’s last big acquisition-fueled push into a hot hardware space involved its takeover of smart-thermostat maker Nest.

Although Nest functioned for years as a largely autonomous unit, last year it folded back into Google.

It is possible we might soon see “Fitbit by Google” wearables, Petrock said.

But the push for Google, and increasingly other tech companies, is about the services they can sell along with the hardware.

Digital health is a fast-growing market, with one study tracking more than $8 billion in venture investment in 2018. The market could bust open once a federal Department of Health and Human Services initiative to give patients better control over their electronic health data becomes a reality.

The Fitbit deal, which is expected to close next year, will also give Google another big chunk of personal health and location data. Google said it will not sell ads using health and wellness data.


US trade offensive takes out WTO as global arbiter

Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

  • Two years after starting to block appointments, the US will finally paralyze the WTO’s Appellate Body
  • Two of three members of Appellate Body exit and leave it unable to issue rulings

BRUSSELS: US disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
Major trade disputes, including the US conflict with China and metal tariffs imposed by US President Donald Trump, will not be resolved by the global trade arbiter.
Stephen Vaughn, who served as general counsel to the US Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
The EU ambassador to the WTO told counterparts in Geneva on Monday the Appellate Body’s paralysis risked creating a system of economic relations based on power rather than rules.
The crippling of dispute settlement comes as the WTO also struggles in its other major role of opening markets.
The WTO club of 164 has not produced any international accord since abandoning “Doha Round” negotiations in 2015.
Trade-restrictive measures among the G20 group of largest economies are at historic highs, compounded by Trump’s “America First” agenda and the trade war with China.
Phil Hogan, the European Union’s new trade commissioner, said on Friday the WTO was no longer fit for purpose and in dire need of reforms going beyond just fixing the appeals mechanism.
For developed countries, in particular, the WTO’s rules must change to take account of state-controlled enterprises.
In 2017, Japan brought together the United States and the European Union in a joint bid to set new global rules on state subsidies and forced technology transfers.
The US is also pushing to limit the ability of WTO members to grant themselves developing status, which for example gives them longer to implement WTO agreements.
Such “developing countries” include Singapore and Israel, but China is the clear focus.
US Commerce Secretary Wilbur Ross told Reuters last week the United States wanted to end concessions given to then struggling economies that were no longer appropriate.
“We’ve been spoiling countries for a very, very long time, so naturally they’re pushing back as we try to change things,” he said.
The trouble with WTO reform is that changes require consensus to pass. That includes Chinese backing.
Beijing has published its own reform proposals with a string of grievances against US actions. Reform should resolve crucial issues threatening the WTO’s existence, while preserving the interests of developing countries.
Many observers believe the WTO faces a pivotal moment in mid-2020 when its trade ministers gather in a drive to push through a multinational deal — on cutting fishing subsidies.
“It’s not the WTO that will save the fish. It’s the fish that are going to save the WTO,” said one ambassador.