Whither Fitbit?

Fitbit, a pioneer in personal quantification, is in the middle of an interesting and decidedly ambitious episode: after acquiring Pebble last December and more recently, Vector– operations that end those companies activities until now, fully integrating them into Fitbit and its plans?—?everything indicates that the company is positioning itself within the tricky smartwatch market, moving on from producing straightforward quantifier devices with a few additional functions.

Fitbit, founded in 2007, developed a wide range of devices: belt-worn trackers, bracelets, and even weighing scales, finally going public in June 2015. It reached its record price, almost $48 a share, a month later, and since then its price has not stopped falling: it is currently listed at around $7.

The acquisition of Pebble may have been opportunistic. A well-regarded company, thanks in part to the communication skills of its founder, Eric Migicovsky, as well as its impact on the burgeoning crowdfunding scene, became a record-breaking fundraiser not once, but twice, raising around $10 million for its first model?—?actually, its second: it had already manufactured and sold one for BlackBerry?—?and then $20 million for its most recent, the Pebble Time. Many people attribute Pebble with kickstarting the smartwatch category: by becoming the first product to reach some popularity in this segment, it has inspired many consumer electronics companies to launch their own models and many users to purchase them. But business is not just about having a good product, manufacturing it and then selling it, and the company was, at the time of the acquisition by Fitbit, on the brink of bankruptcy. Following the acquisition, around 40% of its workforce has been asked to stay on at Fitbit.

Vector is a different case. Developed in Romania, with corporate headquarters in London and staffed by former executives from the watch (Citizen, Bulova and Timex) and consumer electronics industries, the company is one of the most efficient when it comes to specifications: well-designed products with electronic ink screens, good components?—?stainless steel and high quality glass?—?and water resistance up to a depth of 50 meters. And above all, a battery life estimated at around one month. In other words, an interesting product, although as in the case of Pebble, it is possible that it lacks the scale to compete at the highest levels. That said, it has already raised $2 million and was readying for an additional financing round when Fitbit bought it. Again, the company has announced that it will end its own product lines and merge into Fitbit’s structure.

Everything would indicate that Fitbit is readying for the launch of a smartwatch based on an electronic ink screen to compete with the Apple Watch, the leader in the category, something Fitbit has not denied. The idea would be to create a product with a long-lasting battery?—?one of the main problems with the smartwatch?—?that targets the quantification segment. The idea might be to put a smartwatch on the market that integrates well with smartphones and features well-designed alerts that does not require overnight charging?—?allowing it to enter the sleep quantification market, and of course still focused on monitoring physical activity, which has always been Fitbit’s strength. The brand has developed a reputation for secrecy after Apple expelled it from its stores, and decided not to allow its data to be used by the iPhone health application, seeing the company as a competitor.

The problem? On the one hand, Fitbit does not have unlimited resources at its disposal right now. On the other hand, the smartwatch category, although far from a failure, is not exactly effervescent right now: people who wanted a smartwatch have bought one and tried it out already, and people who did not will take their time before committing to a purchase.

Apple had a market share of 70% in the third quarter of 2015, which had fallen to 40% by the end of 2016. Another important competitor, Google, with Android Wear, is looking to update its system and is also likely to generate some traction from its strategy of collaboration with multiple brands.

The smartwatch market is not an easy one. Can a company like Fitbit, after taking on assets with good expertise, aspire to compete with monsters like Apple, Google and others? Is it really going to hit that sweet spot where users wear the watch for several days at a time, forgetting about it and only having to charge as often as their Kindle, while taking advantage of its compatibility with both iOS and Android, its alerts, and its health-measuring capacity?

If it is able to achieve this, it could find a space in the wearables market, even if this means competing with companies like Apple, which having chosen other technologies, especially in relation to their screens, are producing very different looking models that require daily charging. In short, the competition is going to be tough.

(En espa?ol, aquí)