People Are Buying Fitbits and Forgetting About the Apple Watch. Here’s Why


We’re pleased to present the seventh entry in The Twelve Stocks of Christmas, a focus on 12 holiday-related securities that you can invest in right now. While these stocks are available to purchase year-round by anyone, they’re currently receiving more attention due to their products’ popularity during the holiday season.

In the last few years, fitness trackers became the way to get your health on track. Using tiny sensors to track activity, inactivity, and sleep, users are now able to get relatively accurate feedback on their exercise and movements throughout the day. This feedback can then be used to make smart and healthy lifestyle choices, lose weight, and live a fitter, happier life.

Do fitness trackers actually work? Who knows! Yet millions of people are buying them and wearing them, competing with one another on how many steps are taken in a day or how many calories are burned in a workout routine.

There are many companies making these devices, yet Fitbit claims the bulk of the wearable device market share. They’re not sold in Apple Stores and they’re arguably not as fashionable as most bracelets or regular watches, but people L-O-V-E their Fitbits, and they can’t get enough of them. This is especially true during the holiday season, as people buy Fitbits for loved ones or purchase one to help keep a New Year’s resolution.

Does this mean you should consider investing in Fitbit? Let’s take a look:

Fitbit was founded in 2007 by James Park and Eric Friedman.

A. Aleksandravicius / Shutterstock.com

The company started selling the original Fitbit Tracker in 2009, which clipped onto a user’s pants pocket. In 2011, they released the Fitbit Ultra, an upgrade from the original Tracker. To compete with Jawbone, the most popular wearable maker at the time, Fitbit announced the Fitbit Flex in 2013, the company’s first wrist-worn fitness tracker. They went on to release many more wrist-worn fitness trackers, and even fitness-focused smart watches like the Blaze.

Since then, Fitbit became the best-selling wearable device in America.

Shutterstock

Millions of people own Fitbit devices. Apple, which released the Apple Watch to compete with wearable companies, doesn’t have anywhere near the same numbers for their product, and sales of their device are dwindling. Jawbone, a former top-tier competitor, is on their last legs. While Garmin and other smart watch companies continue to rise in popularity, Fitbit’s ease of use, relatively low cost, and popularity amongst active millennials is what makes the company stand out against the competition.

The company recently bought Pebble, a smart watch manufacturer.

nukeaf / Shutterstock.com

Fitbit made this acquisition to improve their existing products, including smart watches. While their current smart watches are selling fairly well, they’re still nowhere near as capable as Android models or the Apple Watch.

Fitbit went public in May of 2015, though their stock hasn’t performed well since.

StockTwits

Shares of Fitbit ($FIT) shot up to $47.60 after their IPO. As of this writing, they’re worth $7.44 a share. Due to the massive decrease in value since the company went public, they began to transition from being a “consumer electronics” company to a “digital healthcare” company, focusing less on feature-packed products and more on the health-oriented uses their devices make. They’re also working with insurance companies and other businesses to offer their devices in exchange for lower healthcare costs.


Should you invest in Fitbit? If you think the company’s purchase of Pebble will help them gain further traction in the smart watch sector, or if you think their healthcare efforts will pay off, then keep an eye out for the company’s future financial filings before you decide to invest.

If you’re of the belief that the company’s stock won’t rise to post-IPO levels again, then you might want to sit this one out.