A lot has been made recently of Apple’s newest version of their smartwatch. And Apple has certainly made significant advancements in not only their own product, but in the genre of smart wearables in general. But even with a larger display, more accurate tracking and sensors, and advanced features like heart monitoring and an ECG built in, there are still some areas where the Apple Watch series 4 falls short. Apple can use in house solutions to untangle these problems, but there is also another option that they could avail themselves of. And in choosing this path, they might find that they are gaining more than they could at first imagine. I think that Apple should buy Fitbit as a whole, and fold them into their smart wearable division. Let me tell you why.
This story begins like many others in past cycles of technology – someone else “invents” a type of tech, and then Apple polishes it up and in some ways perfects it. Or at least, perfects the process of offering it as a solution to John and Jane Doe EveryPerson. So in their own way, smart wearables have been offered long before the Apple Watch was anything more than a sketch on a storyboard at Apple HQ. Android offerings in this area and more importantly Fitbit predate the Apple Watch by several years (which is almost a lifetime in technology terms) – but by using its brand loyalty and immense install base, Apple gave people a reason to buy a smart wearable from them.
So – as with many things, Apple had their own halo effect to drown out the noise from competitors in this newly created and still-in-its-infancy class of tech, such as Garmin, Vivo, and even Fitbit. Fitbit was once the name in fitness trackers and bands, but with Apple’s entry into this market with the original Apple Watch 3 years ago, this once mighty giant of fitness has stumbled, especially of late to get back the traction is once had. In fact…it goes a lot deeper than that.
Fitbit is drowning, and they have used their own resources to generate more and more iterations of their wearable products. They have almost adopted an “Android” like approach, where they generate as much hardware at as many price points as they can, so as to satisfy every segment of the market. They have raced to push their own technology forward, and in each iteration they have added new features and refined their previous designs and value propositions. The second generation of devices like the Alta and Charge lines have added things like heart rate monitoring, and already had a full feature set including step and calorie counting to start. And now, the third generation of Fitbit’s devices are starting to adopt features directly from the Apple Watch – such as the FitBit Charge 3 featuring automatic workout tracking, relaxed breathing reminders, and even water resistance for tracking swim workouts.
And Fitbit has a lead on the Apple Watch in some areas as well – such as native sleep tracking applications. It CAN be done, as the app store already has multiple watchOS apps that will do just that. So this is certainly an area where Apple can improve and provide a native solution. Apple, by buying Fitbit, would get access to this technology, which might be worth the price of the acquisition alone. About the only thing that the Fitbit devices can do that the Apple Watch can’t or won’t is integrate with Android devices. But that’s another story for another time.
In addition, if Apple were to acquire Fitbit and all their business lines, they could do something else – offer a new product segment in the fitness wearable category. Perhaps something like the Alta or Charge; a Apple Watch mini or Apple Band, so to speak. Priced at a more modest $199-$249, it would allow Apple to bring most of the life changing and saving features of the Apple Watch to a larger demographic. This so-called Apple Band would reduce the barrier to entry for most folks, and put heart rate tracking and mobile payments into the hands of those who don’t necessarily need to reply or read their text messages right from their wrists. In fact, in the smartphone world, Apple has already implemented this strategy – the iPhone Xr is designed for people to be able to afford an iPhone that otherwise wouldn’t be able to make it all the way to the iPhone Xs $999 starting price. Why then not something like an Apple Band, which is purely a fitness device, or even one that might be used as a lower cost way to encourage the elderly, infirm, or otherwise unfit to modify their exercise habits or allow them an easier way to monitor their heart rate activity. Even insurance companies would probably find a way to get in on this game, and purchase them in large quantities and subsidize their use in the vast population of Americans who are overweight, obese, or just plain out of shape.
Apple already owns the market on smart wearables. Why not expand that dominence? Why not crush the competition before the competition even leaves the starting line? Or, rather better said – why not buy the competition out and add their unique distinctiveness to their own? Take the great health monitoring features of watchOS and the Apple Watch’s hardware and make it much more readily available to even more of the population at large. Android has a long way to go before it could ever reach the built in adoption rates of most Apple products. So – for many, Apple really is the only game in town. But that doesn’t mean they should stop or even slow down their investment in time, effort, and resources to expand that reach and ultimately generate more revenue and profit. And it could certainly do all those things outright by simply buying Fitbit. And with a trillion dollar market cap, maybe we’ll soon “watch” Apple do just that.