First and foremost, do Fitbit\u2019s actually work? Can people spend $100, wear something on their wrist for a few months and become more active or lose weight? Unfortunately, as you may have suspected, the research is not promising. According to a study done at Mayo Clinic1<\/sup>, when participants were given an activity tracker as part of a broader weight loss program, the group with the tracker lost less weight than the control group. The first possible explanation for this outcome is that when calories burned through a workout are made apparent to the user, that user is more likely to treat themselves to that cookie or extra serving of dinner. Second, while some people are encouraged by the exercise goals and walk laps around their home for an extra 15 minutes at night to meet the target number of steps, others feel discouraged by not meeting them and sink into the couch with a bag of chips.<\/p>\n While these challenges aren\u2019t specific to Fitbit, the mixed results of these studies are riskier to Fitbit. Fitbit has started to sell directly to employers with the first business-to-business wearable called Inspire.2 <\/sup>Fitbit Inspire is one of the most basic versions of the Fitbit, monitoring steps, heartrate and calories burned. They claim to have 6.8 million \u201cpatients\u201d through their employer and insurance provider partnerships, and I worry that as additional studies like the Mayo Clinic study are released, insurers and employers will be less likely to toss in the Fitbit as an add on product in a health benefits plan.<\/p>\n Finally, for your enjoyment, watch a few minutes of this video. The creativity of humankind means there are innumerable ways to hack one\u2019s step counter. A couple of my favorites are at the 1 minute and 3-minute mark. I\u2019m sure it\u2019s quite obvious why this poses a long-term threat in the B2B\u00a0 space.<\/p>\n Potential bright spot: Developing additional non-wearable focused partnerships<\/em><\/p>\n The one bright spot for Fitbit lies in their partnership and software strategy. Fitbit\u2019s mission statement is \u201chelp people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals.\u201d3 <\/sup>They are working to extend beyond the wearables market by partnering with employers, health insurance companies, and medical device makers. These partnerships, combined with the potential increase in capitated insurance models, could allow Fitbit to be a part of meaningful breakthroughs in the way healthcare is managed.<\/p>\n <\/p>\n DTC Strategy: Competition Intensity <\/strong><\/p>\n If we still believe in the even the short-term power of fitness wearables, the next major issue for Fitbit is its competition. It has heated up and continues to do so. Fitbit was one of the first fitness trackers to go mainstream in 2008 and had 67% market share by 2014.4<\/sup><\/p>\n But as smart watches entered the scene, Fitbit\u2019s fall wasn\u2019t so graceful. Fitbit attempted to hold on by releasing their own versions of a smart watch, but reviews of the best wearables from the 2020 CES conference are not highlighting any Fitbit products.5<\/sup> Later entrants to the space are taking the cake this year: \u00a0Suunto, AmazFit (as it turns out this is a brand under Huami, not Amazon), and Withings.<\/p>\n As Fitbit\u2019s revenue has declined, we\u2019ve seen a (although smaller) decline in R&D spend since Q3 2018. R&D spending for the most recent 12 months was below $300M. With giants like Apple gobbling up market share and with R&D spending ending in a B, Fitbit\u2019s ability to keep up a competitive pace of innovation seems unlikely.<\/p>\n Fitbit R&D Spend:\u00a0<\/strong>Trailing Twelve Months; 2013 – 2019<\/strong><\/span><\/p>\n One Potential Landing <\/strong><\/p>\n Fitbit went public in June of 2015 at $20 and quickly jumped to a high of $47.6<\/sup> Since then, declining sales, gross margins, data accuracy lawsuits, and Apple\u2019s smart watch release all contributed to the stock\u2019s performance in the 5 years post IPO. Today, February 11, 2020, Fitbit opened at $6.64.<\/p>\n Fitbit Stock Performance: <\/u>IPO \u2013 February 11, 2020<\/span><\/strong><\/p>\n In late 2019, Google offered to acquire Fitbit for $2.1B.7<\/sup> However, recent antitrust concerns related to how Google would use the data that Fitbit has collected has put the deal on hold and the post-announcement stock price increase is slowly eroding.<\/p>\n All-in-all, Fitbit was a master in creating a consumer craze, but couldn’t hold on. While the sustainability of the entire market is in question, Fitbit does not seemed positioned to win.<\/p>\n <\/p>\n Sources, accessed 2\/10 and 2\/11<\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Fitbit is the incumbent that has failed to innovate quick enough in a growing and changing market <\/p>\n","protected":false},"author":11568,"featured_media":10881,"comment_status":"open","ping_status":"closed","template":"","categories":[25,2636,30],"class_list":["post-10845","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-fitbit","category-heath-tracking","category-wearables","hck-taxonomy-organization-fitbit","hck-taxonomy-industry-consumer-products","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-and-losers-2\/","yoast_head":"\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/02\/Fitbit-on-Dog-1024x1024.jpg\")
<\/a><\/p>\nVideo: Fitbit Hacks<\/a><\/h3>\n
![\"\"](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/02\/Fitbit-Market-Share-1024x753.png\")
<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/02\/Fitbit-RD-Spending-1024x256.png\")
<\/p>\nSource: Macrotrends; https:\/\/www.macrotrends.net\/stocks\/charts\/FIT\/fitbit\/research-development-expenses<\/a><\/h6>\n
![\"\"](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/02\/Fitbit-Stock-Performance-1.png\")
<\/p>\nSource: Google Finance, accessed February 11, 2020<\/h6>\n
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