{"id":19498,"date":"2016-11-18T16:56:49","date_gmt":"2016-11-18T21:56:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/fitbit-say-you-want-a-new-years-resolution\/"},"modified":"2016-11-18T16:56:49","modified_gmt":"2016-11-18T21:56:49","slug":"fitbit-say-you-want-a-new-years-resolution","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/fitbit-say-you-want-a-new-years-resolution\/","title":{"rendered":"FitBit: Say You Want a (New Year\u2019s) Resolution"},"content":{"rendered":"

 <\/p>\n

Glorified pedometers. Ugly jewelry. An overpriced tech fad. Nike\u2019s latest failure[1]<\/a>. There were a lot of monickers thrown around to describe the latest fitness tracking devices. Despite the many non-believers, these small bands that fit around your wrist were the beginning of a much bigger health and connected device revolution.<\/p>\n

The Beginning<\/strong><\/p>\n

Founded in 2007, FitBit was one of the early adopters of this wave of devices. But leading the charge wasn\u2019t easy. The early FitBit only tracked an individual\u2019s steps and looked more like a bulky tie clip (see below). There was also a large margin for error, with something as light as turning a page (while still sitting down!) triggering the recording of a step.[2]<\/a> By 2014, FitBit faced a class action lawsuit when some users experienced skin rashes after wearing the new bracelet version.[3]<\/a><\/p>\n

\"early-fitbit\"<\/a><\/p>\n

Despite some of these earlier setbacks, FitBit continued to innovate. It moved into social, allowing users to compete with each other via \u201cchallenges\u201d or competitions. It also expanded its offerings, adding additional features such as specific activities (running, biking, skiing etc.), Bluetooth for data transfer and the recording of sleep and food. Today, the latest versions include automatic uploads to the app, insights based on user behavior and heart rate monitoring for even deeper health insights. In 2015, the company sold over 21 million devices across 29 million registered users and has the largest market share in wearables.[4]<\/a><\/p>\n

Evolving Model<\/strong><\/p>\n

However, one of the biggest changes came not from the features, but from FitBit\u2019s business model. Despite Nike\u2019s exit from the wearables space, competitors such as Misfit Wearables and Xiaomi started to saturate the consumer market with lower end models and Jawbone occupied the same range as FitBit. In this type of environment, in June 2015, FitBit IPOed.[5]<\/a> With the new infusion of capital and sold out collections with fashion partners such as Tory Burch, FitBit started to gain a lead on Jawbone.[6]<\/a> And then FitBit started to focus on the corporate segment instead, pushing devices to companies, while maintaining its foothold in the consumer segment.<\/p>\n

The corporate wellness market is worth $7.8 billion with 15.9% of that dedicated exclusively to fitness services.[7]<\/a> Recognizing the opportunity there, FitBit has since partnered with nearly 70 companies and continues to seek new opportunities to complement corporate wellness programs.[8]<\/a><\/p>\n

Vision Going Forward<\/strong><\/p>\n

From its current position, FitBit has two potential avenues for future growth. The company can either position itself as a center for a connected home or it can deepen its corporate relationships further and potentially start to penetrate the healthcare sector.<\/p>\n

Being at the center of the connected home seems like a lucrative position as it would make FitBit an indispensable part of the whole ecosystem. Given it is the current leader of wearables vendors worldwide, making FitBit an integral part of the IoT home seems like a great value proposition for all parties.[9]<\/a><\/p>\n

\"idc-wearables-q1-2016-1\"<\/a><\/p>\n

However, this position does not seem sustainable: Xiaomi and Apple are gaining on FitBit and it has lost over 8% market share in just one year, despite overall company growth. In light of that, it appears that moving forward with corporate partners and becoming deeply ingrained there via contracts and large spending programs, could be the best strategic move.<\/p>\n

As of 2016, FitBit represented nearly 70% of all devices used in corporate wellness programs which includes names such as Barclays and Target.[10]<\/a> Even here though, competitors \u2013 especially ones with pockets as deep as Apple\u2019s \u2013 have and will continue to close the gap. These corporate partnerships are helping to secure FtiBit\u2019s position in the market but one additional step to consider is taking those relationships further in the B2B space and partnering with actual health insurance agencies as well. Insurance companies could then begin to push the product to their clients (the Targets and Barclays of the world) and therefore increase the proliferation of FitBit devices. In turn, this will allow the companies to better monitor patient behavior and even begin to adjust premiums based on this tracked behavior.<\/p>\n

Such a move could start a wave of controversy over the invasiveness of such a product and what it does for a patient\u2019s privacy. But maybe such protests are irrelevant. Like many revolutions, maybe this one has already begun and cannot be stopped.<\/p>\n

(722 Words)
\n<\/em><\/p>\n

 <\/p>\n

Bibliography <\/strong><\/p>\n

    \n
  1. Statt, Nick. \u201cExclusive: Nike fires majority of FuelBand team, will stop making wearable hardware.\u201d Cnet News, April 18, 2014, https:\/\/www.cnet.com\/news\/nike-fires-fuelband-engineers-will-stop-making-wearable-hardware\/<\/a><\/li>\n<\/ol>\n
      \n
    1. Murphy, Samantha. \u201cFitbit Charge: A solid fitness tracker you shouldn\u2019t buy.\u201d Mashable, December 6, 2014, http:\/\/mashable.com\/2014\/12\/06\/fitbit-charge-review\/#2YeD4zuDqkqi<\/a><\/li>\n<\/ol>\n
        \n
      1. Burns, Matt. \u201cFitbit Faces Class-Action Lawsuit Over The Force Fitness Tracker.\u201d TechCrunch, March 20, 2014, https:\/\/techcrunch.com\/2014\/03\/20\/fitbit-faces-class-action-lawsuit-over-the-force-fitness-tracker\/<\/a><\/li>\n<\/ol>\n
          \n
        1. FitBit, Inc., December 31, 2015 Form 10-K, https:\/\/www.sec.gov\/Archives\/edgar\/data\/1447599\/000144759916000018\/fitbit1231201510k.htm<\/a><\/li>\n<\/ol>\n
            \n
          1. Nasdaq. \u201cFITBIT INC (FIT) IPO.\u201d http:\/\/www.nasdaq.com\/markets\/ipos\/company\/fitbit-inc-789726-78353<\/a><\/li>\n<\/ol>\n
              \n
            1. Tory Burch. \u201cTory Burch for Fitbit.\u201d https:\/\/www.toryburch.com\/tory-burch-fitbit\/<\/a><\/li>\n<\/ol>\n
                \n
              1. Turk, Sarah. \u201cCorporate Wellness Services in the US.\u201d IBISWorld Industry Report (February 2016). http:\/\/static.politico.com\/3e\/68\/b29a1ff04e7d8bc7c8231352ffc5\/ibis-study-on-corporate-wellness-programs.pdf<\/a><\/li>\n<\/ol>\n
                  \n
                1. Olson, Parmy. \u201cFitbit’s Game Plan For Making Your Company Healthy.\u201d Forbes, January 8, 2016, http:\/\/www.forbes.com\/sites\/parmyolson\/2016\/01\/08\/fitbit-wearables-corporate-wellness\/#48ba07374527<\/a><\/li>\n<\/ol>\n
                    \n
                  1. IDC. \u201cWorldwide Wearables Market Increases 67.2% Amid Seasonal Retrenchment,\u201d press release, May 16, 2016. IDC website, http:\/\/www.idc.com\/getdoc.jsp?containerId=prUS41284516<\/a><\/li>\n<\/ol>\n
                      \n
                    1. Olson, Parmy. \u201cFitbit’s Game Plan For Making Your Company Healthy.\u201d Forbes, January 8, 2016, http:\/\/www.forbes.com\/sites\/parmyolson\/2016\/01\/08\/fitbit-wearables-corporate-wellness\/#48ba07374527<\/a><\/li>\n<\/ol>\n

                       <\/p>\n","protected":false},"excerpt":{"rendered":"

                      Are wearables the IoT version of the Master Cleanse? Or can they really stick? It is still early days but whether you actually kept your New Year’s Resolution won’t be a determining factor. 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