Fitbit filed a public offering of S-1 on Thursday, and its stock trading code listed on the New York Stock Exchange was "FIT." With the intensification of competition in the emerging wearable device market, especially the recent peak of Apple's smart watch, Fitbit hopes to raise $100 million to maintain its leading position in the smart watch market. But even if it becomes a public company, does Fitbit have enough resources to withstand the destruction of Apple's capital-rich high-tech giant?
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Fitbit's business
Fitbit produces networkable wrist and clip-on wearable devices. By monitoring the user's step count, burning calories, climbing floors, travel distance and activity time, users can master their health and fitness processes. Fitbit provides an online platform for both web and mobile applications, allowing users to easily access, edit and track these health data.
In his S-1 prospectus, Fitbit showed some impressive financial data from a company founded in 2007 by a Harvard dropout.
As of March 31, Fitbit has sold 20.8 million wearable devices. In 2014, the company took the lead in the US fitness activity tracker market, occupying 68% of the market. According to NPD Group's research data, Fitbit's 2014 revenue reached 745 million US dollars, more than doubled the previous year's 271 million US dollars revenue.
At the beginning of the product launch, Fitbit continued its rapid growth. The company's 2014 net profit reached $132 million. In the first quarter of 2015, Fitbit had already netted a net profit of $48 million.
Threats from Apple and Google
Despite its excellent performance, Apple or Google are enough to become a deadly threat to Fitbit. In the face of the two technology giants with near resources, Fitbit appears to be weak. Apple or Google is enough to make the pioneer of this wearable device a short-lived.
Google is opening up its Android Wear operating system for wearables to other manufacturers, so the search giant can easily influence the success of existing producers by building partnerships or working with a manufacturer to build Google’s own Wear the device. In turn, if Google and Fitbit work together, Google can also become a catalyst for Fitbit's continued glory.
Apple is the biggest threat to Fitbit. Apple, based in Cupertino, has been eager to define the future of wearable technology since its Apple Watch. Leveraging the company's large loyal user base, Apple Watch can easily become the standard setter for this market, while also clamping Fitbit's market space.
One possible strategy for Fitbit to stand out is to continue its current niche strategy of simply focusing on health and fitness applications. Apple Watch rivals or exceeds Fitbit's current health and fitness tracking capabilities, and its sales premium is also higher than Fitbit. Even if Fitbit chooses this strategy, it remains to be seen whether it will continue to thrive after the Apple Watch goes on the market.
One thing is certain: the wearable market is growing by leaps and bounds. According to IDC, wearables shipped three times in 2013 in 2013. Looking ahead, IDC forecasts that shipments of wearable devices will grow from 21 million units in 2014 to 114 million units in 2018.
After competitors have launched their competitive products, can Fitbit continue to shine in this fast-growing market even after its public offering?
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