Last Wednesday, September 12, 2018, the well-known smart device producer Apple Inc. (NASDAQ:AAPL) held their annual product release event. During the event, Apple released details of their new iPhone models as well as major upgrades to their new Apple Watch Series 4. Almost simultaneous with the Apple Watch Series 4 announcement, shares of the smartwatch maker Fitbit Inc. (NYSE:FIT) fell nearly 7%.
The smartwatch market has growing exponentially from 5 million unit sales in 2014 to a projected 141 million unit sales worldwide in 2018. These devices are designed to enhance the users experience by pairing with a smartphone to allow them to do various things from calling to fitness tracking.
Fitbit specializes in fitness based smartwatches aimed to enhance the users’ workout and help them achieve fitness goals. Their newest model, the Charge 3, is set to go on sale in October of this year. The Charge 3 is said to “blur the line” between smartwatches and fitness trackers by combining the best of Fitbit’s technology into a $149 to $169 smartwatch. This will include heart rate monitoring, run tracking, smartphone app notifications, and even contactless payments.
Apple’s new smartwatch is an obvious stride to compete with Fitbit’s new offering, including many similar aspects such as heart rate monitoring and smartphone app notifications. The Apple watch also is the first watch to have the capability to perform an electrocardiogram (EKG). This is huge as this can not only be used for fitness, but for more preventative action such as detecting irregular or high heart beats.
Although Fitbit’s devices are solid, Apple still has the competitive advantage that they have always capitalized on: brand recognition and loyalty. The challenge Fitbit faces here is competing with the new tech Apple has put out into the space as well as converting loyal customers on to a new device platform.
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