Fitness and health trackers fast gaining traction
According to Fitbit (FIT), connected health and fitness trackers are now rising in popularity in the wearable device market. This popularity may have impacted sales of the Ionic smartwatch, which launched in September 2017.
As shown in the above table, IDC Research expects the worldwide wearables market to grow at a compound annual rate of 18.4% between 2017 and 2021, whereas the smartwatch market is expected to grow at a healthy rate of 22.7%.
Focus on healthcare
Fitbit has stated that it has made significant strides to penetrate the fast-growing healthcare space. According to CEO James Park, “Healthcare is the largest sector of the economy, continues to grow at a robust pace. While the pace of growth is strong we are not yet seeing this translate into better health outcomes at scale due to the focus on episodic care rather than prevention.” Fitbit believes that “the healthcare system is broken” and that technology could play a significant role in helping clinicians deliver personalized care.
Technology might lower healthcare costs as well. Heavyweights JPMorgan Chase (JPM), Berkshire Hathaway (BRK), and Amazon (AMZN) have announced that they would like to reduce healthcare’s burden on the economy and improve outcomes for employees. Fitbit has estimated that over 105 million people in the United States are suffering from health conditions such as diabetes or hypertension, and the company aims to help customers by preventing the onset of these diseases with a focus on health and fitness.
Fitbit was selected by the FDA in 2017 as one of nine companies to participate in a program meant to speed up the development of digital therapeutics and new digital health applications, which might unlock non-device sales for Fitbit. Fitbit also recently acquired Twine, a cloud-based health platform for chronic disease management that connects patients with doctors and health administrators.