{"id":16463,"date":"2016-11-17T20:20:40","date_gmt":"2016-11-18T01:20:40","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\/"},"modified":"2016-11-17T20:22:07","modified_gmt":"2016-11-18T01:22:07","slug":"fitbit-is-the-current-market-leader-but-are-its-steps-limited","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\/","title":{"rendered":"Fitbit is the current market leader, but are its steps limited?"},"content":{"rendered":"

The Financial Times has called David Asprey, a Silicon Valley investor turned health blogger, a \u201cbio-hacker who takes self-quantification to the extreme of self-experimentation.\u201d Asprey claims to have spent over $250,000 hacking his own body to improve his IQ, lose 100 pounds without cutting calories or increasing exercise, and generally improve his overall performance.[i]<\/a> Asprey\u2019s case may be exceptional, but it demonstrates a trend in western culture: After being awash in big data for the last few decades, many people are realizing the potential benefits of tracking their health stats in the same way they track stock portfolios or search engine algorithms.<\/p>\n

Enter Fitbit<\/u><\/p>\n

First sold in 2009, Fitbits are wrist-based and clippable trackers that log users\u2019 daily steps, distance travelled, floors climbed, calories burned, and active minutes. More advanced models can also track sleep duration, sleep quality, and heart rate. Fitbit devices include displays that show users\u2019 statistics in real-time, thus encouraging users to stay on pace. For example, Fitbit encourages users to strive for 10,000 steps each day. Fitbit\u2019s servers automatically sync this data to an online website and mobile apps that allow users to chart their progress in graphical form. Users have the option to share portions of their Fitbit data with family and friends or third party apps. [ii]<\/a><\/p>\n

As the current leader in the wearables industry, Fitbit has much more relevant data than its competitors and benefits from the resulting network effect: I bought my sister a Fitbit over the summer so that we could compete in challenges to see who would log more steps each week.<\/p>\n

One of the keys to Fitbit\u2019s success has been its continuous innovation. After introducing its first clippable device in 2009, the company added altimeter, digital clock, stopwatch, and Bluetooth sync functionality over the following years. In 2013, they introduced their first wrist models – Fitbit Flex and Fitbit Force. These early wrist models caused skin irritation for many users and were eventually recalled.[iii]<\/a> Nevertheless, Fitbit continued to innovate, solved many of the skin irritation issues, and successfully went public in 2015 at a $4.1bn valuation.[iv]<\/a><\/p>\n

 <\/p>\n

10,000 steps a day keeps Apple away? <\/u><\/p>\n

Warable.com estimates that Fitbit\u2019s market share is currently over 70%. Fitbit has become the generic term for wearable tracking devices in the same way that \u201cgoogle\u201d is the generic term for internet searching or \u201cUber\u201d for ride-hailing. Despite this success to date, Fitbit seems to be on an unavoidable crash course with big players who are investing heavily in wearable smart devices, such as the Apple Watch and Android Wear.<\/p>\n

Fitbit\u2019s current approach has been to pivot away from adding functionality that smartphones already offer. Thus, Fitbit is not focused on provided more robust GPS tracking or music playing capabilities. Instead, the company believes that it can maintain its market position by improving its medical diagnostic capabilities, such as adding the ability to measure a user\u2019s body temperature or VO2 max.[v]<\/a><\/p>\n

Fitbit\u2019s decision to focus on its relative advantages as compared to Apple and Google makes sense. Fitbit will never be able to create a more complete smartwatch than Apple can. However, the company\u2019s bet to turn the Fitbit into a sophisticated medical diagnostic device is not without risk. Ten years ago, consumers were happy to carry around a cell phone, a music player, a camera, and a wallet. The rise of the \u201cdo-it-all\u201d smartphone has shown that many consumers would prefer to carry only one device. This preference remains even if the smartphone takes slightly lower quality pictures than the dedicated camera it is replacing.<\/p>\n

I fear that Fitbit may suffer the same fate as the point and shoot camera and the mp3 player. Given Apple and Android\u2019s huge investment budgets, it is likely that the tracking quality in their next generation wearable devices will be comparable to the quality in Fitbit\u2019s devices. Even if Fitbit continues to offer a few differentiated features, how many consumers will be willing to wear two wrist devices?<\/p>\n

 <\/p>\n

Since its founding in 2007, Fitbit has proven itself to be an incredibly innovative company. Fitbit should continue its streak of innovation and develop its medical diagnostic capabilities. Unfortunately, Fitbit operates in a sector that Apple and Android have determined to be core drivers of their next phases of growth. In this context, Fitbit must continually evaluate its strategic alternatives, including selling itself to Apple or Android before these competitors develop too much of these functions in house.<\/p>\n

 <\/p>\n

Word count: 741 words<\/p>\n

 <\/p>\n

[i]<\/a> http:\/\/www.renegadedad.net\/interview-with-dave-asprey-the-bulletproof-executive<\/p>\n

[ii]<\/a> http:\/\/revenuesandprofits.com\/how-fitbit-makes-money\/<\/p>\n

[iii]<\/a> http:\/\/www.wareable.com\/fitbit\/youre-fitbit-and-you-know-it-how-a-wooden-box-became-a-dollar-4-billion-company<\/p>\n

[iv]<\/a> http:\/\/www.cnbc.com\/2015\/06\/22\/fitbit-stock-opens-up-more-than-10.html<\/p>\n

[v]<\/a> http:\/\/www.wareable.com\/fitbit\/youre-fitbit-and-you-know-it-how-a-wooden-box-became-a-dollar-4-billion-company<\/p>\n","protected":false},"excerpt":{"rendered":"

Fitbit has become a billion dollar company by allowing users to easily view leading health indicators such as daily activity patterns, but is the company destined to be swallowed up by bigger data companies such as Apple? <\/p>\n","protected":false},"author":1951,"featured_media":16470,"comment_status":"open","ping_status":"closed","template":"","categories":[2353,60,531],"class_list":["post-16463","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-activity-tracking","category-data","category-fitbit"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nFitbit is the current market leader, but are its steps limited? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fitbit is the current market leader, but are its steps limited? - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Fitbit has become a billion dollar company by allowing users to easily view leading health indicators such as daily activity patterns, but is the company destined to be swallowed up by bigger data companies such as Apple?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"article:modified_time\" content=\"2016-11-18T01:22:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/barry-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"236\" \/>\n\t<meta property=\"og:image:height\" content=\"236\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/\",\"name\":\"Fitbit is the current market leader, but are its steps limited? - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/barry-2.jpg\",\"datePublished\":\"2016-11-18T01:20:40+00:00\",\"dateModified\":\"2016-11-18T01:22:07+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/fitbit-is-the-current-market-leader-but-are-its-steps-limited\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/barry-2.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/barry-2.jpg\",\"width\":236,\"height\":236,\"caption\":\"NEW YORK, NY - MARCH 20: President Barack Obama speaks with Huffington Post reporter Sam Stein during an interview in the West Wing of the White House Washington DC., Friday March 20, 2015. 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