While Apple has become the dominant player in wearable devices with its Apple Watch, and Peloton’s brand has become synonymous with live home cycling, other companies are hustling to keep up. This immense interest in home fitness has inspired some of the largest companies in tech, retail, and apparel to work on building up their own muscles — largely through acquisitions.
Here’s a look at the biggest deals of recent years in wearables and home fitness.
(Aquired FitBit, Fossil IP for $2.14 billion)
Earlier this year, tech giant Google announced its acquisition of fitness wearable technology company FitBit for $2.1 billion. This deal is part of Google’s apparent push to match Apple in the world of fitness-oriented smartwatches. Google’s announcement cited the importance of FitBit’s role in the industry by pointing to one of their newer models, the FitBit Sense, which provides its users with stress management tools and an ECG app to track and assess heartbeat rhythms.
Their most high-tech model yet, FitBit Sense can track everything from your sleep to your stress and blood oxygen levels.
This acquisition comes after a similar move by Google in late 2019, when they acquired Fossil’s smartwatch tech for $40 million.
Given their personal nature, these devices track a ton of user data. The deal was made on the condition that Google could not utilize FitBit data to influence ad targeting for at least 10 years. It remains to be seen how Google plans to merge the intellect of their employees with the technology of these companies, but the result could potentially pose the biggest competitive threat to Apple’s dominance over the wearables market.
(Acquired Mirror for $500 million)
Athletic apparel company Lululemon has recently put their eggs in the basket of home fitness equipment with their $500 million acquisition of Mirror — which Lululemon’s website calls the “nearly invisible home gym.” The smart mirror can be mounted on any wall and contains access to fitness routines, classes, and acts as an omni-channel portal to Lululemon’s entire catalogue of fitness products.
A large portion of their strategy moving forward, while public attitudes on returning to gym memberships remain foggy, is to utilize the cultivated interest for home fitness during the COVID-19 pandemic to assure its users that Mirror can provide everything they’ll need to live a healthy lifestyle from the comfort of their own homes. A large portion of this push will be focused on building brand awareness through persistent advertising from their own ad departments and what they’re calling specialized Mirror “ambassadors.” Lululemon expects Mirror to generate between $250 to $275 million during the current fiscal year.
The spearhead of their longevity strategy with the product comes with Mirror’s $39 per month subscription fee, giving users access to training programs. If successful, this recurring revenue stream could spell a new subscription model for the fitness industry comparable to a monthly subscription to Netflix or Disney Plus.
(Acquired Atlas Wearables, Otari, Aiqudo, Precor for $498.1 million)
Earlier this year, the connected fitness company Peloton — known for its home exercise bikes — completed the acquisition of three fitness companies for a combined price tag of $78.1 million. The move is part of their larger effort to expand their lineup of products to become a universal fitness brand. Atlas Wearables made early impressions in the market of fitness smartwatches when they were founded in 2014. This acquisition could spell a future for a Peloton-branded smartwatch that could track your activity on and off their bikes.
Aiquo, another company included in the acquisition deal, is known for their AI digital voice assistant technology. This could potentially spell a merger of AI tech with the bikes, rumored smartwatches, or both. Otari, the third company, was in the midst of designing an “interactive workout mat” including an HD screen. How they’ll be using this tech is still unclear, although Chief Executive Officer John Foley hinted at potential strength-training or rowing machines during an interview with Bloomberg.
The final Peloton acquisition, of fitness equipment provider Precor for $420 million, aims to solve Peloton’s somewhat recent issue of production delays. The increased demand as a result of the pandemic has left Peloton struggling to keep up with the surge, resulting in longer delays in delivery times to its customers. With the Precor acquisition finalized earlier this year, Peloton will see an increase in R&D potential as well as access to the United States’ immense manufacturing capabilities.
(Acquired MyFitnessPal for $475 million; resold it for $345 million)
Fitness apparel company Under Armor acquired the fitness-oriented app MyFitnessPal for $475 million back in 2015. At the end of last year, they sold the platform to Francisco Partners for $345 million — a $130 million drop in value after five-and-a-half years. Upon the initial acquisition, Under Armor’s goal was to build their brand into the consciousness of MyFitnessPal users, increasing the demand for their fitness apparel and accessories while encouraging a sustained healthy lifestyle.
Looking at the supposed failure of their strategy, it seems that the attempt to draw in entry-level fitness users that were either working out for the first time or just looking to track their eating habits didn’t end up translating into a substantial profit for their brand — which is marketed as equipment for seasoned professionals and enthusiasts who compete or have a passion for fitness.
This, combined with Apple’s dominance in the entry-level market, made it hard for Under Armor to compete with the tech giant’s free default software already installed on the Apple phones/smart-watches of their customers. As previously mentioned, Google’s status as a default brand in the lives of the average consumer might help them get a leg up on Apple — a strategy Under Armor couldn’t seem to execute.
(Acquired Misfit Wearables for $260 million)
Fossil Group, the Texas-based fashion company, acquired wearable tech company Misfit in late 2015 for $260 million. Fossil managed to take Misfit’s tech developments and combine them with their expertise in aesthetic cohesion to make sleek and analog options attractive and affordable.
Their catalogue offers everything from subtly-designed trackers to hybrid watches like the 2018 Path model, which features an analog display and a battery that can last up to six months. With Google acquiring some of Fossil’s smartwatch team in 2019, it’s unclear what the future of the brand will look like. For now, it seems as though nurturing the brand’s compatibility with Google products is the key focus.
(Acquired Withings for $191 million)
Finnish telecommunications and consumer electronics company Nokia purchased the digital health business Withings in 2016 for $191 million. Just two years later, Nokia sold it back to Éric Carreel, the startup’s co-founder. Carreel bought back the company and its product line-up, including Bluetooth bathroom scales and fitness watches, for an undisclosed amount.
Carreel told Forbes he regretted comparing his business to FitBit early on. In doing so, he missed opportunities to expand Withings’ product line and adapt his approach to fitness-oriented equipment. Moving forward, he hopes to shift the focus of Withings toward assisting health providers through data collection while also providing consumers with top-of-the-line health devices.
(Acquired Runkeeper for $85 million)
Japanese fitness apparel company ASICS struck an $85 million deal with the Boston-based FitnessKeeper to acquire their mobile fitness platform RunKeeper — which tracks the GPS location of its users to document their fitness activity and interact with friends who are also using the service. RunKeeper turns fitness into a social platform that encourages trying new formulated routes and creating challenges for you and your friends to take on.