The last month of calendar year 2016 was busy for Fitbit. The company announced the acquisition of Pebble – an acquisition to enhance its smartwatch products of the future. More interestingly, from a digital health point of view, a partnership with Medtronic was announced. The partnership focuses on integrating data from Fitbit devices in managing diabetes. Diabetics using Medtronic’s iPro myLog mobile app will be able to take in activity and sleep data from Fitbit devices with the purpose of understanding how these metrics affect overall blood glucose levels. Doing this allows for additional precision of managing diabetes in many ways, including providing better care coordination, adjusting drug dosages, and is also an additional avenue of engagement with the patient. So far in 2017, Fitbit has announced the integration of its devices with Qualcomm Life’s 2net platform to enable UnitedHealthcare Motion members using Fitbit activity monitors.
Fitbit will have a direct clinical impact, something CEO James Park has hinted at over that past 12 months, as being of long-term strategic importance to Fitbit. Fitbit’s stock has been tanking the last year reaching $7, down from $30 in December last year, the reason being lower sales expectations for Q4, poor performance of new products and low growth in emerging regions. It seems as the hype around activity monitors has passed, and the market is expecting more meaningful applications, which is why Fitbit is almost forced into developing actual medical devices that are regulated by the FDA – a move that will either save the company’s long-term stance in healthcare or potentially lead to its demise.
The product to market process will be more complex and Fitbit will not be able to respond to consumer demand as timely as they currently are able to. In contrast, developing a meaningful application will likely give the company a competitive advantage, and all of its partnerships across employers, payers and providers will be strengthened. Main competitor, Jawbone, is also developing medical grade technologies following its acquisition of Spectros last year, which indicates that a general shift to medical grade is happening in the digital health market for wearables. The big question then becomes, as these applications become medical grade, are they meaningful enough in the sense that individuals using these devices will achieve a better quality of life?
For questions or inquiries, please contact Roeen Roashan, Roeen.Roashan@ihsmarkit.com.