Fitbit is exploring a sale of the company as it continues to lose market share to its rivals, a new report claims.
Reuters says the company hired investment firm Qatalyst Partners to explore a sale, with Google parent Alphabet one of the names suggested by the firm as a potential buyer.
Qatalyst has reportedly also suggested Fitbit consider private equity firms, according to sources speaking to Reuters. (Update: Fitbit told us it doest not comment on rumors or speculation).
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According to the report, Fitbit hasn’t decided to pursue a sale, and may choose not to do so.
But none of this comes as a huge surprise, with the company being squeezed at both ends. It’s struggling to gain a foothold in smartwatches, where Apple continues to dominate the market share; while its fitness tracker business is being eaten into by companies like Xiaomi, which continue to offer functionally comparable devices for less money.
Further to this, sources inside the company speaking to Wareable over the last few months have express concern over Fitbit’s leadership. Some say there has been increasing pressure from investors for CEO James Park to step down, and for the company to appoint another leader to take on its biggest rivals.
Fitbit’s Versa smartwatch was a successful product, and signaled the company might be able to turn things around after the poor performance of the Ionic – its debut smartwatch.
But sales of the follow-up Versa Lite were also disappointing, forcing Fitbit to cut its 2019 revenue forecast. The company just launched its latest product, the Versa 2, which adds Alexa and a new design, and while initial feedback is positive (including our review) it’s difficult to predict how well it will perform.
Apple is the ever-growing threat for Fitbit, having just launched its Series 5 and cut the price of the Series 3 down to $199, which could pose a major problem for sales of the Versa 2.