Newest Wearables From Apple And Fitbit Set Up A Fitness Battle – Fortune

Before Apple’s first smartwatch went on sale last year, Wall Street analysts had high hopes for the sharp looking wearable device.

On average, they expected Apple would sell over 20 million in 2015 and 33 million this year. Revenue estimates were $10 billion for 2015 and $17 billion for 2016.

It hasn’t turned out nearly so well. The first Apple Watch suffered from limited battery life, slow apps, and a somewhat confusing user interface, leading to mixed reviews and slow sales after an initial burst. Apple shipped only 11.6 million watches last year and just 3.1 million in the first half of this year, according to estimates by International Data Corp. (Apple doesn’t disclose its watch sales)

By contrast, sales of cheaper and more focused fitness trackers have continued to boom. Fitbit is by far the leader in that segment, trailed by the likes of Jawbone and Garmin. Fitbit, which unlike Apple discloses sales every quarter, sold 21 million devices last year and 10.5 million so far in 2016.

At the start, the two companies had quite different strategies. Apple’s original watch performed a myriad functions and had its own apps, while selling for $349 to over $10,000. Early Fitbits cost under $100 and mostly tracked steps and other fitness and athletic activities.

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But it’s becoming increasingly clear that the two companies and their strategies are converging in important ways. Apple is adding fitness features and trying to tap into the social networks of avid exercisers. Fitbit, which could claim those moves as areas of strength, is adding more smartwatch-like notifications and more fashionable accessories, aping some of Apple’s core features. That should set up the holiday shopping season of 2016 for a battle royale to win over fitness and exercise geeks.

The new features on Apple’s updated series 2 watch unveiled on Wednesday were all about fitness, including GPS tracking and a partnership with Nike


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to tap into the sneaker maker’s network of millions of avid runners. “We think Apple Watch is the ultimate device for a healthy life,” Jeff Williams, Apple’s chief operating officer, said.

Apple


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also said it would upgrade its original watch, now called series 1, with a faster processor and sell it for just $269.

Analysts quickly noticed the more focused emphasis. “Apple appeared to break from touting Apple Watch’s health applications, instead introducing sports features to cater to runners and swimmers,” Bernstein Research analyst Toni Sacconaghi wrote.

“Apple is clearly focused on gaining share in the fitness community,” Deutsche Bank analyst Sherri Scribner noted. “The standalone GPS is an important upgrade and the lower price of Watch series 1 puts the product in a more competitive price range.”

Among Fitbit’s newer trackers is a $250 almost-smartwatch called the Surge that includes built in GPS tracking and heart rate monitoring. The even newer $200 Blaze looks more like a smartwatch, with a color screen and brightly colored bands, but also has the GPS tracking and other fitness-oriented functions. And Fitbit


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has revamped its app to make it easier to connect with friends and create social fitness challenges, like a group of runners living in different places who all time themselves and compete running a certain distance.

Both companies could use a boost as far as Wall Street is concerned. Apple’s stock has barely budged in the past year, down 3%, while Fitbit has lost more than half its value, down 54%. Apple investors would love to see a new hit product, while Fitbit investors are fearful of the challenge from Apple.

To see a hands on with the new Apple watch, watch:

Still, it is possible that both companies could thrive. Apple’s cheapest watch is still priced higher than Fitbit’s most expensive tracker. And there may be room in the market for both lines to flourish. At a recent event touting Fitbit’s new $100 Flex 2 tracker, one executive even noted that the device was slender enough to wear on the same wrist with a watch, though he didn’t name any watchmakers.

And some analysts say the greatest risks in this battle are for smaller fitness tracker players, like Garmin


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. Garmin makes a range of devices including some that look like smartwatches and cost over $500, but its main focus is on fitness tracking features. Apple’s moves could steal away some of its sales. “We view the inclusion of GPS in the Watch and the partnership with Nike, in the context of a greater focus on fitness by Apple, as a risk for Sell-rated Garmin, particularly as new features are largely geared towards runners and swimmers,” Goldman Sachs analyst Simona Jankowski warned.

Sometimes when the giants fight, it’s the smaller players that get trampled.

from myhealtyze http://www.myhealtyze.tk/newest-wearables-from-apple-and-fitbit-set-up-a-fitness-battle-fortune/