Fitbit is the current market leader, but are its steps limited?

Fitbit has become a billion dollar company by allowing users to easily view leading health indicators such as daily activity patterns, but is the company destined to be swallowed up by bigger data companies such as Apple?

The Financial Times has called David Asprey, a Silicon Valley investor turned health blogger, a “bio-hacker who takes self-quantification to the extreme of self-experimentation.” Asprey claims to have spent over $250,000 hacking his own body to improve his IQ, lose 100 pounds without cutting calories or increasing exercise, and generally improve his overall performance.[i] Asprey’s case may be exceptional, but it demonstrates a trend in western culture: After being awash in big data for the last few decades, many people are realizing the potential benefits of tracking their health stats in the same way they track stock portfolios or search engine algorithms.

Enter Fitbit

First sold in 2009, Fitbits are wrist-based and clippable trackers that log users’ daily steps, distance travelled, floors climbed, calories burned, and active minutes. More advanced models can also track sleep duration, sleep quality, and heart rate. Fitbit devices include displays that show users’ statistics in real-time, thus encouraging users to stay on pace. For example, Fitbit encourages users to strive for 10,000 steps each day. Fitbit’s servers automatically sync this data to an online website and mobile apps that allow users to chart their progress in graphical form. Users have the option to share portions of their Fitbit data with family and friends or third party apps. [ii]

As the current leader in the wearables industry, Fitbit has much more relevant data than its competitors and benefits from the resulting network effect: I bought my sister a Fitbit over the summer so that we could compete in challenges to see who would log more steps each week.

One of the keys to Fitbit’s success has been its continuous innovation. After introducing its first clippable device in 2009, the company added altimeter, digital clock, stopwatch, and Bluetooth sync functionality over the following years. In 2013, they introduced their first wrist models – Fitbit Flex and Fitbit Force. These early wrist models caused skin irritation for many users and were eventually recalled.[iii] Nevertheless, Fitbit continued to innovate, solved many of the skin irritation issues, and successfully went public in 2015 at a $4.1bn valuation.[iv]


10,000 steps a day keeps Apple away? estimates that Fitbit’s market share is currently over 70%. Fitbit has become the generic term for wearable tracking devices in the same way that “google” is the generic term for internet searching or “Uber” for ride-hailing. Despite this success to date, Fitbit seems to be on an unavoidable crash course with big players who are investing heavily in wearable smart devices, such as the Apple Watch and Android Wear.

Fitbit’s current approach has been to pivot away from adding functionality that smartphones already offer. Thus, Fitbit is not focused on provided more robust GPS tracking or music playing capabilities. Instead, the company believes that it can maintain its market position by improving its medical diagnostic capabilities, such as adding the ability to measure a user’s body temperature or VO2 max.[v]

Fitbit’s decision to focus on its relative advantages as compared to Apple and Google makes sense. Fitbit will never be able to create a more complete smartwatch than Apple can. However, the company’s bet to turn the Fitbit into a sophisticated medical diagnostic device is not without risk. Ten years ago, consumers were happy to carry around a cell phone, a music player, a camera, and a wallet. The rise of the “do-it-all” smartphone has shown that many consumers would prefer to carry only one device. This preference remains even if the smartphone takes slightly lower quality pictures than the dedicated camera it is replacing.

I fear that Fitbit may suffer the same fate as the point and shoot camera and the mp3 player. Given Apple and Android’s huge investment budgets, it is likely that the tracking quality in their next generation wearable devices will be comparable to the quality in Fitbit’s devices. Even if Fitbit continues to offer a few differentiated features, how many consumers will be willing to wear two wrist devices?


Since its founding in 2007, Fitbit has proven itself to be an incredibly innovative company. Fitbit should continue its streak of innovation and develop its medical diagnostic capabilities. Unfortunately, Fitbit operates in a sector that Apple and Android have determined to be core drivers of their next phases of growth. In this context, Fitbit must continually evaluate its strategic alternatives, including selling itself to Apple or Android before these competitors develop too much of these functions in house.


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Student comments on Fitbit is the current market leader, but are its steps limited?

  1. Very interesting article. I agree with your point that Fitbit needs to innovate around the areas that are its competitive advantage (ie scientific/medical applications vs. standard smartphone capabilities). My questions is whether medical diagnostic capabilities are truly its competitive advantage. As you mentioned in the beginning of the article, people like David Asprey, who use Fitbit to “scientifically alter” their behavior are the minority. It can be argued that most Fitbit users only wear Fitbit to “feel better” about their physical activity. Given the fact that Fitbit’s stock has fallen ~70% in the last year, what do you think they can do to reenergize the investment community?

  2. I agree that large tech companies like Apple will be a large threat to Fitbit. Even with body temperature and oxygen, I think Fitbit will need to think hard about what clinical attributes they can truly detect. The ability to track steps is a little bit of a gimmick. Sure, it can tell you if you walked more in a given day but it lacks true behavior change. In fact, a recent study showed that people who wore fitbits actually lost less weight than a reference group ( Perhaps there is an effect where if a user hits 10,000 steps, they feel they have earned the right to eat a double-fudge cake. Right now Fitbit has greater share of mind among people, but without true technological innovation that can measure clinically useful attributes and drive meaningful behavior change, I think it’s sunk.

  3. Interesting piece, Will! I also have a Fitbit, which I got from work, but used because of competition with co-workers like you had with your sister.

    I had not previously thought of Fitbit as being that innovative from a technological standpoint, but as successfully commercializing existing technology. Of course, pedometers tracked steps before Fitbit, and I believe there was technology to track heart rates and sleep patterns, but Fitbit incorporated it into an easy-to-wear wristband that became trendy and social!

    I agree with your opinion that Fitbit will not be competitive with the Apple Watch in many ways, but I think that Fitbit can continue to win price. I also think that while Apple can keep adding more features, only certain users value these features; others (late adopters, more casual walkers and runners) like the basic Fitbit to track their fitness levels. However, Fitbit needs to make sure that its devices stay relevant, a harder thing to do for a trendier product. Like you mention early on, perhaps Fitbit can leverage the fitness data from its customers (without violating their privacy) to pivot.

  4. Dear Will,
    It was super interesting to read your blog. I agree to your point that it is very important to consider the size and extent of the whole ecosystem. These days digital healthcare creates a greater environment which entails various key players from each sectors, including wearable companies, medical device manufacturers, and more importantly mobile companies like Apple and Google, as you mentioned. I also think that Fitbit should think about the way to blend in that huge ecosystem. Again, It was helpful and exciting to read. Thank you.

  5. I think one way Fitbit can stave off Apple and Android is by positioning themselves as the most accurate wearables company for serious athletes. As a Division I athlete, I would work with wearables a lot during my rowing workouts. We would do heart rate workouts at least twice a week and I found that all wearables, Fitbit included, were often wildly inaccurate. Nothing can quite do the job (yet) of a heart rate monitor, but wearing one is not the most comfortable thing in the world. If Fitbit can somehow figure out how to get more accurate heart rate results in real time, I think many athletes out there will jump to buy a device.

    Another feature that Fitbit should consider adding is determining your hydration levels based on your sweat. I would often forget to drink water throughout my workout and I would really suffer the next day. If I had a watch telling me exactly when to drink water, based on my own body and not a generalized statistic, I would buy a wearable in a heartbeat.

  6. Thanks for highlighting Fitbit Will! I have a Fitbit device and use it daily. If I’m representative of a regular power user of Fitbit, my concern is about the company’s investment in its software. Fitbit already has the majority market share, so I think they need to do more to ensure they keep those users happy with the products they currently have, of which the software/app is a non-trivial part, in addition to developing newer products that the company foresees its users wanting to have with the medical diagnostic capabilities, etc.

  7. As an “avid” Fitbit user, I was very excited to see a blog post about the wearable device. I wholeheartedly agree that Fitbit won’t be able to keep up with Apple watch, but also agree with Kelly regarding ways in which Fitbit could differentiate itself in the market. I do think, however, that Fitbit may lack first mover advantage when it comes to accurate performance reporting. Whoop, a startup out of Harvard, is meant to “monitor heart rate, sleep patterns, and other data to help athletes fine-tune their bodies.” Given Whoop’s extremely high price point, I wonder if Fitbit would be able to reach Whoop’s accuracy levels at an affordable price.

    I noted that I was an “avid” Fitbit user (in quotations) because, while I wear my Fitbit ever day, I rarely (if ever) check my dashboard and/or review my results. How can Fitbit change consumer behavior so that users are actually engaging with the data to ensure that Fitbits and its associated data become indispensable to users? Until Fitbit is able to accomplish this, I have a hard time seeing Fitbit rebound in the market.

    About Whoop:

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