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Fitbit Strikes Deal With Google That Could Lead to Wearables Collaboration

April 30, 2018, 9:42 PM UTC

Fitbit has teamed up with Google in an effort to get more deeply involved in the healthcare sector.

The fitness tracker maker announced on Monday that it would use Google’s recently announced health data standards for apps, known as the Google Healthcare API, to connect its wearable devices to the electronic medical records systems used by doctors and hospitals. The aim eventually is to allow doctors to get health data straight from Fitbits on their patients’ wrists.

Fitbit will also move to Google’s (GOOGL) cloud data storage platform, much of which is already certified as complying with the federal Health Insurance Portability and Accountability Act, or HIPAA, which regulates the use of medical records. That could free Fitbit from having to build its own similar systems that comply with the law.

“Working with Google gives us an opportunity to transform how we scale our business, allowing us to reach more people around the world faster, while also enhancing the experience we offer to our users and the healthcare system,” Fitbit CEO James Park said in a statement. “This collaboration will accelerate the pace of innovation to define the next generation of healthcare and wearables.”

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Both companies have struggled somewhat in the wearables market lately. Fitbit was the market leader a few years ago when fitness trackers were all the rage but it has slipped as consumers have looked more to smartwatches from Apple, Samsung, and others to track their travels and run apps, too.

Plunging sales two years ago sent Fitbit’s shares into a tailspin—they’re down more than 70% from their 2015 initial public offering price—although it has unveiled a well-reviewed watch of its own called Versa. To turn things around, Fitbit has been shifting its focus from just weekend athletes to healthcare and in February acquired healthcare data service Twine, which helps connect people with chronic conditions like diabetes and hypertension with coaches and doctors.

Meanwhile, Google’s Android Wear software failed to catch on for several years and was recently renamed Wear OS. The company largely relied on other gadget makers to build smartwatches running its software, but as it did with phones, may have to step in and make its own products.

With both companies looking for a boost in wearables, the announcement of the new partnership also hinted at possible deeper product cooperation in the future. “Finally, Fitbit and Google are collaborating to bring together the strengths of both companies to innovate and transform the future of wearables,” the companies said in a statement, without mentioning any specifics.

Shares of Fitbit (FIT) gained 5% on Monday to close at $5.55 on the news of the deal.