Investors who watch wearable technology stocks may be monitoring their own elevated heart rates.
The announcement Friday that Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) will buy Fitbit Inc. (NYSE: FIT) jolted the wearable fitness products sector, an increasingly crowded field that’s also getting more scrutiny over the potentially sensitive health data the monitors collect.
It also has clearly excited investors.
Fitbit shares surged this week after reports of Google’s plans and it was up more than 15% on the confirmation Friday. Shares of competitors Garmin Ltd. (NASDAQ: GRMN) and Apple Inc. (NASDAQ: AAPL) also were up.
Sales Are Up
Apple said this week its wearables segment are seeing rising Apple Watch sales that are boosting earnings, and Loup Ventures estimated last month that Watch revenue is set to grow 20% and account for 59% of total wearables revenue and 4% of total revenue.
Garmin, meanwhile, reported a 28% increase in its fitness sector when it reported earnings this week, primarily driven by growth in wearables.
Fitbit reported earlier this year that second-quarter sales of its fitness trackers spiked 51%.
Other competitors include private Finnish company Suunto which started out as a compass maker, Korea’s Samsung, which makes the Galaxy Watch Active, and the French company Withings, which bought Nokia Oyj (NYSE: NOK)’s health tech business last year.
Even as the surging sales of fitness trackers sends pulse rates higher, the increasingly capable watches and the data they can now can collect have also raised issues around consumer privacy. The concerns come as big tech companies, including Google, face broader scrutiny over what they do with all the data they have from various platforms.
Google tried to assuage those concerns.
“When you use our products, you’re trusting Google with your information,” Google Senior Vice President Rick Osterloh wrote in announcing the Fitbit acquisition.
“With wearables, we will be transparent about the data we collect and why. We will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data.”
Photo courtesy of Fitbit.
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