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Why Fitbit Acquired Twine Health

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Fitbit acquired a cloud-based healthcare startup

Wearables company Fitbit (FIT) agreed to buy a cloud-based health platform, Twine Health, on February 13. Twine Health’s software tracks chronic illnesses and connects patients with doctors for assistance.

Fitbit tackled dwindling shipments with its own smartwatch Ionic, which was an effort better compete with Apple’s (AAPL) smartwatches. Ionic helped lift Fitbit’s market share. Apple is Fitbit’s biggest rival in the US wearables space (WEAR).

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Apple has been making strides in health tracking

Recently, Apple Watch received an upgrade as Apple improved its heart rate–sensing features. Apple has also made advances in the field by launching a heart rate study with Stanford University and American Well.

Apple (AAPL) may also develop a needle-free blood sugar monitor, which may have prompted Fitbit to acquire Twine Health to remain competitive. This acquisition appears to be a positive step for the company. However, the long-term effect of the acquisition on Fitbit’s disjointed software ecosystem remains to be seen.

Fitbit’s stock price has fallen more than 8.0% in the last 12 months. In 2017, Fitbit lost its global market share to Xiaomi and Apple 1H17 but regained some ground in 3Q17.

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