Generally speaking, most companies don't like it when Apple steps into their competitive ring, since the Mac maker has a propensity to disrupt the status quo and dominate new industries. The fitness-tracker market is extremely young, but it already faces some potential threats from the even younger smartwatch market, since smartwatches also include health and fitness tracking capabilities.
As Fitbit leads the fitness-tracker pack with an estimated 85% market share, it stands to reason that it theoretically has a lot to lose if Apple Watch takes off. That may not be exactly the case.
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There's very little customer overlapThe fact is that there will be very little overlap -- not only between the markets but also between the prospective customer bases.
Fitbit is targeting mainstream users who want to have greater access to their health and fitness data and hope that a small, wearable device will help get them motivated. It's true that Apple is also appealing to users with the Apple Watch, but with one important distinction: The Apple Watch requires an iPhone. For that reason, Fitbit's broad cross-platform support is a good defense, since the company plays nicely with Android, Windows Phone, desktop platforms, and iOS. The Apple Watch may appeal more to iPhone users, but the majority of the world's smartphones now run Android. That's allowed the company to grow its active user base to over 9.5 million as of the first quarter.
That's not the only way in which there's little overlap. Not including Fitbit's WiFi-connected smart scale, the pricing spectrum of its fitness trackers ranges from just $60 for the clip-on Zip to $250 for the Surge smartwatch. Apple Watch, on the other hand, ranges from $350 for the Sport to $17,000 for the Edition. Apple has talked about avoiding price umbrellas in the past, but it's extremely unlikely that the Mac maker will ever move downmarket enough to put that much direct pressure on Fitbit, especially since the Apple Watch is a multi-function device, while most of Fitbit's devices are single-purpose.
Even in terms of brand, Fitbit is a health-centric brand, while Apple is a premium lifestyle brand. Little overlap there.
What about Google Fit?Google has responded to Apple's Health app with Google Fit, its own version of a health-tracking app. That also means the coming onslaught of Android Wear smartwatches will plug into Google's platform directly. Fitbit has been working hard to broaden its platform into an expansive ecosystem, allowing third-party developers to use application programming interfaces and more.
In fact, Fitbit should technically be more concerned about Android Wear smartwatches than it should be about Apple, particularly since Android Wear devices will inevitably see rapid commoditization and pricing pressure as OEMs compete with each other, which will probably push the prices down closer to Fitbit territory.
The Apple Watch is undoubtedly a threat to Fitbit, but the risk isn't as great as you might think.
The article 1 Reason Fitbit Shouldn't Be Afraid of Apple originally appeared on Fool.com.
Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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