Fitbit SWOT Analysis for 2021: 25 Biggest Strengths and Weaknesses

Fitbit created the health tracker wearable market in 2007 and has since become a market leader in its segment. With stiff competition and an ever-changing environment that comes with many technology-based industries, maintaining market share has been no easy task.

Below we discuss the Strengths, Weaknesses, Opportunities and Threats that the pioneering company faces.

Strengths

1. Fitbit maintains a strong market position among powerful competitors.
Fitbit pioneered the wearable fitness device, with its first-mover advantage allowing it to maintain a healthy market position. Since its inception, Fitbit has maintained roughly 3% market share. Fitbit defined its own industry, with the brand name becoming synonymous with wearable health and fitness technology, creating an incredibly strong brand awareness that continues today.

End-user spending on wearable devices is estimated to increase from $51.55 billion to $62.69 billion. (Statista)

2. The ecosystem that Fitbit offers has become very popular with its users, enjoying great success.
Fitbit allows its users to connect to different devices and platforms, ranging from sports tracking apps to health insurance companies wanting to reward their clients for a healthy lifestyle. This has translated to a large uptake and adoption of Fitbit’s ecosystem, allowing for further market engagement and revenue potential.

Fitbit is the second-largest health and fitness app on the Google Play Store worldwide with a revenue of $1.439 million. (Statista)

3. Due to Fitbit’s constant health monitoring of its userbase, its access to data is second to none.
Through Fitbit’s exceptionally large user database and the nature of the product being worn by the client, Fitbit has managed to amass a huge amount of data on people wearing its device. This data can be used in a variety of ways, from risk analysis to disease prevention. This data is proving to be exceptionally valuable to many industries for companies to better understand their markets and their markets’ habits.

Fitbit has attracted over 30 billion users. (Statista)

4. Fitbit’s direct relationship with users through its direct distribution offers the company great insights into its market.
Fitbit maintains a direct relationship with the individuals who use its products, distributing products directly to the customer. This offers the company a strong position in maintaining its finger on the pulse of its market. Fitbit offers retail and direct shipping to service its markets.

Fitbit has attracted over 500,000 subscribers to Fitbit Premium. (Fitbit)

5. Google owns Fitbit, bringing the power of Google to the brand.
Although there are concerns over privacy issues, with Fitbit presiding over large data sets containing key information about the population’s health, Fitbit benefits from being owned by Google. With Google’s technological ecosystems offering a strategic barrier to other tech players’ inroads into the fitness tracker/smartwatch market, Google offers Fitbit a renewed edge with its research and development powers, as well as budget and datasets.

Google’s takeover of Fitbit was pegged at $2.1 billion. (The Verge)

6. Fitbit creates a platform to compete among friends and peers.
With personalized statistics and performance analysis, the Fitbit platform creates the perfect environment to develop healthy competition among friends and benchmark performance against peers. As the metrics such as heart rate, speed, and recovery times are developed and recorded against each activity that you have and uploaded to a common platform, it’s easy to compare your results to peers.

New Yorkers walk the most steps out of any state, with an average of 7734 steps in winter and 8807 steps in summer. (Verywell Fit)

7. There are Fitbit-orientated apps for activities beyond fitness.
While the obvious use of a Fitbit device would be for fitness tracking, there are many apps developed by Fitbit and third parties that make use of the Fitbit sensor capabilities. For example, Fitbit has a Find My Car app, which tracks the location where you parked your vehicle.

Calorie Tracker has been the most successful fitness app in the Google Play Store with $1.44 million in revenue. (Statista)

8. There is a large range of Fitbit devices offered on the market.
If you are looking for a device to simply track your steps or the amount you sleep, Fitbit offers simple, entry-level devices for basic metrics. If you need something more comprehensive, Fitbit’s devices offer full vital statistics, heart rate, oxygen saturation levels, sleep states, and ranges, as well as skin temperature and stress-based metrics.

Fitbit detected the Covid-19 virus in 2,000 subjects as part of a study of 187,000 people wearing fitness devices. (Wareable)

Weaknesses

1. Slow to evolve toward a smart ecosystem, Fitbit struggles with a limited target market.
Fitbit has been fairly slow to adapt its products from a fitness device/activity tracker to a fully-fledged smartwatch, allowing competitors to gain market share. These competitors have developed their own ecosystem that offers cross-functionality, like the Apple watch’s compatibility with other Apple products. Fitbit has attempted to enter into the smartwatch market, but remains only marginally successful.

Fitbit’s sales peaked in 2017 with 25.4 million sales, then dropping to 16 million sales in 2019. (Statista)

2. Cheaper competition for Fitbit means that market share will become harder to take back.
The fitness tracker/wearables market has seen a large influx of cheaper competition. Companies like Huawei, Xiaomi, and, to a certain extent, Samsung, have products with similar functionality at lower prices.

Fitbit’s market share has dropped from 3.8% to 2.6% of all units shipped worldwide, whereas cheaper brands have like Huawei and boAT have increased market share over that same period. (GSMArena)

3. Handset manufacturers offer competing products with greater functionality.
Smartphone companies that manufacture wearable devices designed to connect to their primary products – their smartphones – have similar features to that of Fitbit, in addition to the normal features of a smart wearable device. Fitbit may look at developing a fitness-orientated smartphone, but that would offer large challenges and seems unlikely.

Apple maintains 55% of the smartwatch market with 7.6 million units shipped worldwide. (Statista)

4. Fitness-only trackers can be seen as a novelty, meaning limited continued value.
Devices that have limited functionality beyond fitness tracking are used for a shorter period of time, and these users are less likely to be return customers. Devices that have been able to transcend into smart devices that offer enriched features and connectivity are more successful in the marketplace and see more customers upgrading when new models become available.

One-third of users stopped using their fitness trackers within six months. (Digital Initiative at Harvard Business School)

5. The Fitbit metrics have been criticized for being inaccurate.
Fitbit often relies on estimates rather than actual metrics. It has been criticized that the inclusion of estimates does not offer a decisive view of an individual’s health, which can be a strong reason for an individual to own a Fitbit device.

A report has shown that Fitbit devices can miscalculate heart rate by up to 20 beats per minute in the average workout. (CNBC)

6. Fitbit uses steps as its primary metric for fitness.
Although activity is seen as an imperative to improve an individual’s health, Fitbit places too much emphasis on steps and does not consider important metrics such as body mass index or calorie intake.

Fitbit users take more than 46 trillion steps per year worldwide. (DMR)

Opportunities

1. Fitbit has built a strong interest in the health sector, developing innovation and synergies with its brand.
Combining Fitbit’s machine learning algorithms, exceptionally large dataset, and target sensors, Fitbit is able to offer medical screening devices that can focus on a range of ailments. This has allowed Fitbit to broaden its industry penetration from health and fitness-focused industries to health care, with early warning capabilities and diagnosis functionalities. Such new functionality allows healthcare workers to monitor patient vitals remotely.

Fitbit’s electrocardiogram (ECG) algorithm was able to detect 98.7% of atrial fibrillation cases in a multi-site clinical trial. (Fitbit)

2. Strategic partnerships offer Fitbit a marketing advantage in the sports and medical industries.
Partnerships have allowed Fitbit to explore synergies in industries where wearables have previously not featured. This allows insights that were previously not possible and have benefitted industries such as medicine and professional sports.

Through a partnership with the Feinstein Institute of Medical Research, early studies indicate that vitals monitored by Fitbit can indicate the prevalence of diseases such as COVID-19 with a 50% accuracy. (Nextgov)

3. Corporate and health insurance incentives ingrain Fitbit in household habits.
Health insurance companies are utilizing the data that devices like Fitbit provide to refine their insurance policies. The logic suggests that this is a win-win scenario where individuals benefit from incentives offered, and the insurance companies benefit from individuals who live longer, therefore paying more premiums over their lifetime, with fewer claims due to preventable illness.

Health insurance policyholders that subscribe to fitness tracker-based incentive schemes live 13 to 21 years longer than those who don’t. (CBC Radio-Canada)

4. Wearables and sports sensors are becoming more important in professional sports for monitoring and tracking.
Professional team sports are increasingly incorporating wearables into their performance monitoring and including sensors in differing aspects of the game. For example, Sportable partnered with Gilbert to develop the first smart rugby ball to gather data around trajectory, impact forces, and other key statistics.

Microprocessors in professional sports process 1,000 data points every second. (Medium)

5. Fitbit can do more to attract third-party developers to produce compatible apps for its products.
Metrics that are generated and measured on the Fitbit platform are available to third-party app developers to create software that exploits these metrics for various outcomes. This has the potential to develop sport-specific applications for users to download onto their devices. An example of this could be accelerometers to identify once a surfer has caught a wave and to measure what exactly that surfer does on each wave.

The Fitness app segment is pegged to grow by 32% to $3.5 billion. (Club Industry)

6. Fitbit can enrich its wearable versatility with more and with diversified sensors.
More and more sensors and variables are becoming viable with wearable technology, especially when coupled with nearly constant internet access. This opens up a world of opportunities for a company like Fitbit to develop specific wearables for biometric analytics. Recently, Fitbit released a blood oxygen saturation sensor, which can diagnose illnesses such as sleep apnea.

18 million people suffer from Sleep Apnoea in the United States. (mobi health news)

Threats

1. Competition is growing in fitness and health tech worldwide.
Fitbit’s market is experiencing continued pressure from new technology, capabilities and entrants into the market. Existing brands with existing customers are absorbing market share by selling devices that supplement their primary products as well as compete with Fitbit’s competencies.

Apple and Samsung lead device shipments worldwide with 7.6 million devices and 1.9 million devices shipped, respectively. (Statista)

2. Established athletic brands have more credibility.
Brands with established sports-oriented products and services offer more credibility in the market. Although Fitbit can counter this with partnerships as it has done with Adidas, it may be easier for brands to enter the market and compete with Fitbit due to their existing market presence and userbase. An example is Garmin’s existing GPS client base being a perfect target market for wearable GPS-enabled fitness trackers.

Garmin sales are up 37%, awarding the tech giant with 8% of the smartwatch market. (Wareable)

3. Privacy issues with the Google merger sow doubt with users and anti-trust regulators.
Google’s purchase of Fitbit presents a privacy issue with policymakers and anti-trust organizations. Fitbit maintains the health data of its vast userbase on servers within the company, which means that Google has access to this information. The concern is what exactly Google will do with this data. Google could use this information to target advertising based on users’ health and fitness statistics.

Google has been fined $230 million during 2019 due to data breach activities. (Wired)

4. Technology is always changing, and Fitbit will need to keep up with the times.
Brands are specializing in their fields and improving their product lines. Garmin, which is a major competitor in the wearable fitness space, has consistently built on and improved its products, delivering cutting-edge technology and developing devices tailored to certain sports.

Worldwide investment in wearables increased from $218 million in 2015 to $6.3 billion in 2020. (The SMS Group)

5. Continuation under Google might be challenging with Google’s corporate environment and data policies.
Further concerns have been raised by the market in the continuation of the Fitbit brand under Google ownership. There has been speculation that Google has the potential to strip out the valuable aspects of Fitbit and put those into Google’s own wearable products. Further concerns are that Google may absorb Fitbit’s data collected over the years to use it for targeted advertising.

Fitbit’s share price dropped 18% in the months after the announcement of the merger with Google. (Barrons)

Fitbit has defined a market segment in wearable health-tracking devices. It has managed to maintain a healthy market share, dictate the direction of an industry, and cement its name as a synonym for its industry. Becoming part of Google will help Fitbit retain its market position, if Google chooses to keep it alive.

The post Fitbit SWOT Analysis for 2021: 25 Biggest Strengths and Weaknesses appeared first on BrandonGaille.com.

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