Fitbit remains bullish, pumped up about Asia
By Edwin Yapp August 24, 2015
- Introduces a range of fitness trackers targeted at casual to high performers
- Remains unfazed despite stiff competition; confident in its tech to stay ahead
WEARABLE technology has been getting a lot of publicity in the past year and one segment that has hogged the headlines in particular is fitness trackers. A quick anecdotal survey of the market reveals over 10 brands already in the market.
The usual suspects include traditional sport brands such as Nike with its Fuel Band and Adidas with its Fit Smart. Other niche players invading the market include Fitbit Surge, Jawbone UP, Misfit Flash, Moov NOW, Jaybird Reign, and Withings Pulse.
Non-dedicated fitness players have also joined the fray, with products such as Garmin Vivofit, TomTom Runner Cardio and the Microsoft Band.
Finally, bringing up the rear are smartphone players whose products include fitness tracking capabilities such as the Apple Watch, Samsung Gear Fit and the Xiaomi Mi Band.
According to Juniper Research, wearable devices have exploded into the consumer consciousness in the last two years and when use cases become established, they will be the next big thing in consumer electronics.
A recent white paper (registration required) published by the British-based tech research firm noted that fitness trackers have been around for several years and are the most widely used wearable devices.
Juniper Research says fitness has been the first consumer segment to have a large range of devices available, such as accelerometers, thanks to increasingly cheap motion sensors.
Such is the potential that the firm expects over 18 million smart fitness wearables (including both devices and clothing) to have been in use by the end of 2014.
“This figure will almost treble by 2018 and Juniper expects fitness to remain the dominant wearables segment until that time, driven by intuitive use cases and lower retail prices,” according to the white paper.
More bullish is Counterpoint Research, which predicts that the wrist wearables market is projected to grow from 20 million units in 2014 to 59 million units in 2015, driven by the likes of Apple Watch and the cheaper Mi band.
According to Fitbit Inc, one of the leading players in this segment, the uptake of fitness trackers is only going to grow as people become more aware of such devices and the benefits they can bring to their lives.
In an interview with Digital News Asia (DNA) in Kuala Lumpur, its vice president and general manager Steve Morley (pic) says the proliferation of smartphones and their apps, and the emergence of affordable sensor technology, are some contributory factors that have encouraged the market.
Asked why Fitbit is so confident in its growth prospect given that only a small segment of the market are fitness buffs, he says the company’s philosophy is not to merely build products for sports and fitness enthusiasts.
Fitbit is about helping people get fitter whatever their goals may be, and the company’s products hit at three different levels so everyone is catered for, he declares.
Arguing that there is no one size that fits all, Morley says, “At one level, we cater to a person wanting to simply walk the dog.
“At the next level, we help people wanting to improve their health and live a healthier lifestyle by walking and exercising more.
“And at the highest level, we cater to those wanting to be active in sports and those who are high-performance athletes. At the end of the day, we don’t put you in the bracket and force you to exercise,” he adds.
Unperturbed by competition
The San Francisco, California-based tracking technology startup was founded in 2007 by James Park and Eric Friedman, and is a pioneer in the fitness tracker segment.
In June this year, it listed on the New York Stock Exchange opening at US$30.40 a share, up 52% from initial offering of US$20, according to Fortune. The shares are trading at about US$39 currently.
Fitbit says its mission is to empower and inspire people to live healthier active lives, helping them to achieve their health and fitness goals, whatever they may be, with the products it designs.
Citing numbers from research firm NPD Group, Fitbit claims market leadership in the fitness tracker segment with about 85% US market share in March 2015, up from 67% in the same period in 2014. Its revenue more than tripled in the quarter through March 2015, from a year earlier, and earnings are also rising fast.
The company also claims to have nearly sold 21 million devices as of March this year, saying that its products have also helped users take 43% more steps, which they would otherwise not have taken.
But Fitbit is under pressure from competitors, while smartwatches such as the Apple Watch are also taking on the fitness tracking market.
To add further misery, rival Jawbone recently sued Fitbit, alleging that it “stole intellectual property, infringed patents and poached employees,” according to The New York Times.
But Fitbit remains unfazed, with Morley saying that it still retains a significant advantage over the competition.
Acknowledging that consumer products are normally driven by what people want, he argues that people are still choosing Fitbit over the rest because of several advantages.
“For instance, the ubiquity of our product – Fitbit works with some 150 iOS, Android and Windows phone products in the market, and people can choose to use our products without the fear of being locked in, like [with] our competitors,” he says.
“Besides ubiquity, there is the social element to our products. Our social integration is stronger and we believe it encourages an increase in activity levels by as much as 27%. This means that more people want to be on our platform,” he claims.
Morley also says Fitbit’s latest products not only come in a variety of colours and form factors, but that its latest Surge and Charge HR (heart rate) products both have an accurate heart rate monitoring technology – Purepulse – that’s based on three years of research.
“Heart rate monitoring using optical technology isn’t new, but it’s hard to get accurate heart rate readings over the wrist,” he says.
“We took three years to get it right and we now have the ability to automatically track heart rates all day, all night, and during workouts – including resting heart rates, which are a widely used indicator of cardiovascular fitness and conditioning,” he adds.
Coming to Malaysia
Meanwhile, Morley says Fitbit entered the Malaysian market in June, as part of its expansion plan for the Asia Pacific region. It first entered Asia via Hong Kong, followed by Singapore.
He says the company then chose to enter China, Japan, South Korea and India, and is now concentrating on expansion into Malaysia and Thailand, and is expected to follow up with the Philippines, Indonesia and Taiwan.
Quizzed as to what criteria is used to enter specific markets, Morley says Fitbit targets countries whose citizens live a busy, modern lifestyle, and with a significant smartphone penetration and a well-organised and strong retail base with which to display its products.
“These three elements are very important to us as it helps us position our brand nicely in the markets we go into,” he says.
Fitbit was introduced in Malaysia by the company teaming up with a number of retailers including RadioShack, All IT Hypermarket, AOne Plus, iStore, Harvey Norman and Superbuy.
Prices for the cheapest Fitbit Zip start at RM250 (US$61) and scale up to RM968 (US$237) for flagship device, the Fitbit Surge.
Morley says that Fitbit is also looking to work with other types of retailers such as sports and departmental stores, as well as telcos, but has not completed these negotiations yet.
“At the end of the day, we want to make Fitbit available to as many people as possible, something that is in line with our company’s philosophy,” he says.
Next: Some of Fitbit’s challenges, and whether it can stay relevant in today’s market
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