Billion Dollar Unicorns: Fitbit Struggles To Stay Relevant

Fitbit may have been a pioneer in the wearable tracker market, but it has definitely lost its first mover advantage. Last year, Fitbit had acquired smartwatch player, Pebble, for an estimated $23 million. The acquisition was a great deal for Fitbit considering that it had offered to buy Pebble for $740 million in 2015. It followed that with the $15 million acquisition of Vector Watch. Both Pebble and Vector failed to sustain their holdings in the market with Apple’s rising presence. Fitbit managed to buy them at a discount and has leveraged their assets to deliver its smartwatches. Fitbit has been slow to enter the smartwatch game. It released its first smartwatch, Ionic, only last year. By then, Apple’s smartwatch was already on its third release.

Earlier this spring, Fitbit released another version of its smartwatch – Versa. Versa was not available for sale for the reported quarter, but recent reports suggest positive feedback from the market. With Versa, Fitbit hopes to win some of its market back. It has priced Versa at $200, compared with the entry point of $300 for the Apple Watch. Besides the price, Versa also comes with added features such as being water-resistant up to 50 meters, and a long battery life. Time Magazine called it the biggest threat to the Apple Watch given the quality of its activity tracking and delivering notifications. Fitbit has also managed to grow its third-party apps marketplace. Versa users can choose from more than 550 third-party apps that include those from companies like Yelp, Starbucks, and Pandora.

Additionally, Fitbit plans to bring back some of its lost mojo through targeted acquisitions and tie-ups. It recently announced a tie-up with Google that will allow Fitbit to leverage Google’s expertise and resources to improve its product. Fitbit will also move its platform to Google Cloud so that it could benefit from advanced analytics and AI capabilities.

Earlier this year, Fitbit announced the acquisition of Twine Health, a coaching platform. The acquisition suggests that Fitbit wants to make its presence felt within the healthcare segment. Twine Health is a HIPAA-compliant, cloud-based health management platform that connects people with chronic conditions like diabetes and hypertension with coaches and doctors who can help them follow healthier lifestyles. Terms of the acquisition were not disclosed.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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Larry Ramer 5 months ago Contributor's comment

I think the partnership with Google will turn out to be a big key.