Wearable device maker Fitbit
Fitbit has struggled to gain a foothold in the smartwatch category, as Apple
At the same time, Fitbit’s dominant share of the fitness tracking sector continues to be chipped away by cheaper offerings from companies such as China’s Huawei and Xiaomi.
Fitbit has held discussions with investment bank Qatalyst Partners about whether it should engage with potential acquirers, the sources said.
Fitbit has not yet decided to pursue a sale and there is no certainty it will do so, the sources said. Qatalyst has been seeking to persuade Fitbit to explore its options for several weeks, arguing it could attract acquisition interest from Google owner Alphabet Inc
The sources asked not to be identified because the matter is confidential. Fitbit and Alphabet said that it is their policy not to comment on rumours and speculation. Qatalyst did not respond to a request for comment.
Fitbit shares rose 22% to $4.48 on the news, giving the company a market capitalization of more than $1.1 billion.
Fitbit cut its 2019 revenue forecast in July, blaming disappointing sales of its newly-launched cheapest smartwatch Versa Lite. The watch is priced at $160, compared with the $200 the full version sells for. It can track workouts and heart rate, but lack features such as the ability to store music directly.
Fitbit’s fitness trackers monitor users’ daily steps, calories burned and distance travelled. They also measure floors climbed, sleep duration and quality, and heart rate.
Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.
In August, Fitbit said it had signed a contract with the Singapore government to provide fitness trackers and services in a health programme it said could reach up to 1 million users.
Fitbit in August also launched its latest smartwatch, Versa 2, adding Amazon.com Inc’s
© Thomson Reuters 2019