Alphabet is Jamie Lee Curtis, walking a mile in wearable-loving Apple's shoes. Apple is Lindsay Lohan, adapting to life in the Google smart home.
Alphabet’s fortune cookie = get fit
Google ad revenue is Alphabet's cash cow, but it's not growing like the golden days. To scale "other revenue," it's made an offer to acquire Fitbit, per Reuters. This is a big step: Fitbit has a market cap of ~$1.6 billion, which is more than Alphabet spent on Waymo, healthcare projects, and all the Other Bets combined in Q3 this year.
Fitbit kicked off the fitness tracking craze at the start of the decade with single-purpose wearables. But it struggled to keep pace as Samsung and Apple rolled out sophisticated, phone-paired smartwatches.
- In Q2, Fitbit had 10% of the global smartwatch market, compared to Apple's 46%.
- Fossil fared worse and was in the "others" category, per Strategy Analytics. The company licenses Google's Wear OS for its watches and sold Google some IP earlier this year.
Apple’s finding a way to make it work at home
The iPhone maker is recruiting engineers to reboot its smart home program, Bloomberg reported Monday. Apple wants to 1) grow the third-party device ecosystem supporting Siri and 2) build smart devices beyond its HomePod speaker.
As Apple looks past the iPhone for new revenue sources, connected home devices could be a nice complement to its strong smartwatch game. The challenge: HomePod has teency market share relative to Google Home and Amazon Echo. And HomeKit, Apple's smart home platform, only works on roughly 450 third-party devices. Google's tops 10,000; Amazon's works with 85,000.
What’s a happy movie ending?
- For Apple: Smart home growth and maintaining its personality—privacy-friendly and tight oversight of developer platforms.
- For Google: More ambient computing, a new stream of personal data, and opportunities to inject AI savvy into the physical world. So basically, itself + Fitbit.
- For Amazon: On its quest to put Alexa everywhere, it probably wouldn't mind a Freaky Friday swap with iOS or Android.
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