Consolidation seems likely in the wearable fitness tracking industry.
The global consumer lifestyle and fashion accessory maker Fossil Group this month acquired the wearable fitness tracking startup Misfit for $260 million, according to ZDNet. Given the glut of companies making such wearable devices and the likelihood that the tools will become standard in most smartwatches, some observers expect that the sector will soon see more consolidation.
The Fossil deal for Misfit makes sense for both companies. Misfit will gain capital it needs to grow its distribution, while Fossil acquires Misfit’s cloud-based app platform that it otherwise would have been forced to develop on its own. Misfit also has a line of smartwatch brands that it controls, and also licenses its technology to major brands including Michael Kors, Emporio Armani, Diesel, DKNY and several others.
Because Misfit already runs on a battery watch and does not need to charge, Fossil can quickly integrate the new tool into its products. The company plans to debut the integrated products next year.
The Fossil acquisition of Misfit is not the first in the sector, and analysts expect it won’t be the last. Previously apparel maker Under Armour has been buying fitness app developers, and now more acquisitions may be coming.
For example, Fitbit could become a target of larger companies. Thus far the company has successfully avoided being assimilated into the smartwatch trend, but the brand could become a premium offering in a larger company’s stable.
Under Armour has the needed data and may decide a hardware partner makes sense, or Nike could decide an acquisition makes sense as a way into the sector.
Another possible target is Jawbone, which has iconic status with its combination of fitness tracking and audio speakers, but the company is struggling financially. Google, Apple, or even the Chinese firm Huawei could be interested in acquiring the company.
Garmin, with its fitness trackers and widely used GPS technology is another potential acquisition target for some tech companies, while a traditional watch maker could be interested in the Pebble brand of products.
