Wearable Fitness Trackers Industry Analysis
We live in an age where you will see many people walking around with a digital watch or fitness tracker. Beginning in the late 2010s, we saw a rise in wearable fitness trackers that include brands such as FitBit, Apple, and Samsung (Statista, n.d.). Products that would fall under the category of wearable fitness trackers include smart watches, heart-rate monitors, and fitness bands (Whoop) while other products such as an Oura ring, smart glasses, or hearables do not fall under WFT (wearable fitness technology).
When looking at the environment through the 5-Forces Framework, there are two main areas to focus on. The first is the threat of new entrants which has evolved over the last few years. Look more specifically at the entry barriers new entrants must overcome to enter an already strong market. Product differentiation has started to expand when looking at the difference between a FitBit and an Apple Watch. Apple has continuously upgraded their Apple Watch every year to now even include a feature that would alert first responders if you were in a car accident. With new entrants, it would be extremely hard to compete with how large Apple’s R&D team is that focuses just on new technologies to include in their Apple Watch causing this to be a competitive force. While Apple has grown, FitBit continues to stay in its respective lane with a more “basic” smartwatch that does not include extra features such as the one mentioned above. The capital requirements for a new entrant to compete or break into the environment would also be very high causing it to be difficult to start. The second of the 5-Forces Framework is rivalry among industry firms. We can see an example of this in Apple’s ecosystem of all the technology they offer in the market. Brand loyalty is extremely valuable, and many firms focus on that with marketing and integrations of their products. The iPhone and Apple Watch are a perfect example of this. Each month you have a health challenge that you can only view from the Watch application on your iPhone. Having such a high brand loyalty that Apple, Samsung, and FitBit do, creates a rivalry when looking even outside of the wearable fitness technology industry. Many products solely work with their corresponding smartphone which creates a highly competitive force.
The pivotal force in wearable technology is fitness bands which include Oura Ring and Whoop. Many people are moving towards a less stimulated experience with so many screens and features in their lives. Both technologies offer similar features that an Apple Watch does but without the watch face. With new entrants and a change in consumer needs, the profitability will increase over 2-5 years. Technology is advancing at such a high rate that WFTs will only increase in functionality which could also mean an increase in cost for consumers. With an increase in differentiation as seen in Whoop, the entry barrier will decrease and create a more competitive market.
