Pathway to the Future of Fitbit - Foster School of Business · 2017-05-23 · Pathway to the Future...

5/18/2017

1

Tyler Brown | Kayla Baczewski | Ethan Smith | Maya Donoghue

April 8th, 2017

Your Workout. Your Data. Your Choice.

Pathway to the Future of Fitbit

START

OVERVIEW

SECURITY

PRIVACYGLOBAL

END

FINANCIAL Summary

OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 1

General Market ConditionThe wearable market is highly saturated and growing fast

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16 2Q '16 3Q '16 4Q '16

Sha

re o

f shi

pmen

ts

Fitbit Xiaomi Garmin Samsung Jawbone Apple BBK Lifesense Other

By the end of 2016, 5 main players (Fitbit,

Xiaomi, Garmin, Samsung, and Apple) made up over 60% of shipments world wide

325

453

593

722

835

929

0

100

200

300

400

500

600

700

800

900

1000

2016 2017* 2018* 2019* 2020* 2021*

Con

nect

ed w

eara

bles

in m

illion

sThe Industry as a whole is growing fast,

expecting to grow over 185% of 930 million wearable devices in

2021

Sources: Statista, Company Website

2OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

2014 2015 2016* 2017* 2018*

Sha

re o

f uni

t sal

es

Smartwatch Health & fitness trackers Wrist sport computers Other wearables

General Market ConditionThere are large growth opportunities outside of the US and Europe but smart watches will quickly overtake pure fitness trackers in popularity

China and the Asian Pacific have grown significantly

since 2014 and will continue to with growing

populations and increasing health awareness

0

20

40

60

80

100

120

140

2014 2015 2016*U

nit s

ales

in m

illion

s

Western Europe Developed APAC China North America Other regions

As the industry grows, consumer preference will

shift to smartwatches over fitness trackers as they get cheaper and have longer

battery life



5/18/2017

2

Competitive Landscape

Price

Features

Series 2

Series 1Gear 3 FrontierGear 2

Gear Fit2

Pedo

meter

Smart W

atch

Zip

One

Flex

Alta

Alta HR

Charge 2 Blaze

SurgeFenixChronos

VivosmartHR

Forerunner 35

Mi Band 2

Flash Link

Ray

Fitbit has more options at different price points than other brands

Sources: Fitbit website, Misfit website, Xiaoma website, Garmin website, Samsung website, apple website


Changing Technology

Create new Market

Manage Existing Market

Minimal Technology Change

Radical Technology Change

DesignBattery Life

Hydration Tracking

Meditation

Heart Rate Accuracy

Blood Sugar Tracking

Smart PatchSmart Clothing

Fitbit should invest in technology that will support the existing market

Sources: Company Website, Wearables, Sports Illustrated, Business Insider


Changing Technology

Create new Market

Manage Existing Market

Minimal Technology Change

Radical Technology Change

DesignBattery Life

Hydration Tracking

Meditation

Heart Rate Accuracy

Blood Sugar Tracking

Smart PatchSmart Clothing

Fitbit should invest in technology that will support the existing market

Sources: Company Website, Wearables, Sports Illustrated, Business Insider

Key Takeaways

Market Conditions: The global wearable is growing rapidly with extreme growth in the Asian markets. The market is highly saturated and will start to become dominated by Apple and Samsung as smartwatches gain popularity

Technology Changes: Although there are lots of technology innovations upcoming in the market, Fitbit should focus on technologies that manage the existing market as well as focus on their software


Top Customer ConcernsCustomer’s worry about how companies secure and use the data they gather

Lack of Transparency

Collection and Use of Data

Use of Data for Targeted Marketing

Data Security

Sources: Statista, Company Research, American University Study

21

3 4


5/18/2017

3

Data Protection in the USData Protection Laws are a patchwork between federal, state, and best practices

No Current General Federal LawsFederal Trade

Commission ActHealth Insurance Portability

and Accountability ActBest Practices

Prohibits unfair or deceptive practices such as failure to protect data,

change privacy policy without adequate notice, and failure to comply with posted policy. Principles are voluntary in nature

HIPPA regulated medical information, focused on individually identifiable

health and medical information. HIPPA

regulated the use and disclosures of such

information

The FTC Fair Information Practice Principles

represent widely accepted concepts. They focus on

notice, awareness, choice, consent, access,

participation, integrity, security, and enforcement

Various State LawsCalifornia State Law

The California Online Privacy Protection Act requires a commercial website to conspicuously post its privacy policy on its websites and deals with the use of personally identifiable

information taken through the internet. Sources: Thomson Reuters, FTC Website


EU General Data Protection RegulationEU Data Protection Laws are more stringent and comprehensive than the US

Comprehensive Data Protection LawsExpanded Territorial Reach

Best Practices

Data Protection Officers

Accountability and Privacy

A company outside the EU that is targeting consumers in the EU will be subject to GDPR

Companies must designated a Data Protection Officer in certain circumstances

Data Controllers must demonstrate compliance by maintaining certain documentation, and implementing data protection

Data Processors

Data Processors have direct obligations to maintain a written record, designate a data protection officer, and notify the controller on becoming aware of a personal data breach

Consent

A data subject’s consent to processing personal data must be as easy to withdraw as to give consent. Data subjects have the right to object to personal data being used for direct marketing

Fair Processing Notices

Data controllers must provide transparent information to data subjects when data is obtained

Sources: Allen and Overy


EU General Data Protection RegulationEU Data Protection Laws are more stringent and comprehensive than the US

Comprehensive Data Protection LawsExpanded Territorial Reach

Best Practices

Data Protection Officers

Accountability and Privacy

A company outside the EU that is targeting consumers in the EU will be subject to GDPR

Companies must designated a Data Protection Officer in certain circumstances

Data Controllers must demonstrate compliance by maintaining certain documentation, and implementing data protection

Data Processors

Data Processors have direct obligations to maintain a written record, designate a data protection officer, and notify the controller on becoming aware of a personal data breach

Consent

A data subject’s consent to processing personal data must be as easy to withdraw as to give consent. Data subjects have the right to object to personal data being used for direct marketing

Fair Processing Notices

Data controllers must provide transparent information to data subjects when data is obtained

Sources: Allen and Overy

Key Takeaways

United States: The US has very little federal oversight into how companies protect the data they get from consumers

European Union: The EU’s new General Data Protection Regulations provide more stringent laws for companies in order to provide more protect for consumers

Overall: There is not clear leader in the wearable market in terms of privacy and security policy.


Bits

Privacy

Security

Watch

Current Future

Complete customization with enhanced privacy settings

Increased security to protect customer data from hacking

Earn redeemable bits for sharing data with approved researchers

Privacy and SecurityFitbit needs to position themselves as a leader in privacy and security



5/18/2017

4

Saving SharingYou choose what data is

recorded

Never Shared:• Name• Location• Other personal

identifiable information

You choose who can see your data

• Friends• Family• Registered Doctors• Fitbit Research (Using aggregate de‐identification)

PrivacyCustomers have options to pick what they want to track and what they want to share



Heart RateSteps

Sleep Duration and Quality

Calories Burned

Distance Traveled

Floors Climbed

Active Minutes

SmartTrackWeight, Body Fat, BMI

Caloric Intake

Age Gender

By default no data is savedOptions to save metrics By default sharing is offAbility to change at any time

What Users Can SaveCustomers will have control over which features Fitbit Save

Sources: Company analysis


Heart RateSteps

Sleep Duration and Quality

Calories Burned

Distance Traveled

Floors Climbed

Active Minutes

SmartTrackWeight, Body Fat, BMI

Caloric Intake

Age Gender

Only share saved dataOption to share dataYou choose who you share with

✓Fitbit Research | ✓Family & Friends | ✓Doctors

Ability to change at any time

What Users Can ShareCustomers will have control over which features Fitbit is able to collect and share data on



Bluetooth LE External AuditMultifactor

AuthenticationEncryption

+

Data Protection Officer

Fitbit can use Bluetooth LE technology to ensure users

cannot be tracked by utilizing a

random MAC address

Fitbit should hire an external security audit

team to routinely check the integrity of firewalls and

other protection software

Fitbit should require a

multifactor login for users

as well as require users

to change passwords once a year

Fitbit should develop new encryption technology based on

protecting data from wearable

devices

Fitbit should hire a data protection officer to

oversee the security of customers

private data

User Data SecurityData Security focuses on ensuring no one other than Fitbit and the customer can access their data



5/18/2017

5

1000 steps earns 1 bit500 bits redeem for $5 gift card or donate to charity

Competitions for addition bits

Challenge friends for their bits

Partnerships

Earn Bits for SharingUsers can earn rewards for hitting certain step goals



Data used by: • Research centers• Insurance companies• Universities

Partnerships

Fitbit ResearchData is used to create a healthier future for all

All data is stored on Fitbit servers & users can delete their data at any time

Data used for: • Heart disease research• Diabetes research • Obesity research



Marketing Platforms

Your WORKOUT Your DATA Your CHOICE

The data you create while using our technology is private, this is why we

protect it like it is our own using world class security.

We let you choose the features you want based on your privacy settings.

You can change your settings and delete your

data wherever and whenever.

We want to help you accomplish your fitness

goals. That’s why we have built the best fitness

tracking software and devices.

Marketing a New Era of PrivacyMarketing strategy will focus on Fitbit’s industry leading privacy and security policies



Marketing Platforms

Your WORKOUT Your DATA Your CHOICE

The data you create while using our technology is private, this is why we

protect it like it is our own using world class security.

We let you choose the features you want based on your privacy settings.

You can change your settings and delete your

data wherever and whenever.

We want to help you accomplish your fitness

goals. That’s why we have built the best fitness

tracking software and devices.

Marketing a New Era of PrivacyMarketing strategy will focus on Fitbit’s industry leading privacy and security policies

Key Takeaways

Marketing: Roll out the “Your Workout. Your Data. Your Choice” program through numerous channels to educate consumers about privacy and security which will increase demand for our products.

Privacy: Customers will have the ability to save and share their fitness data based on the categories they select. By default no information is saved or shared. All data recorded is aggregated and anonymized.

Security: Implement world class security by leveraging Bluetooth LE, stronger encryption, multifactor authentication, a new data protection officer, and external audits to ensure reliability and security.

Bits: Bit rewards are used to keep customers motivated to reach their desired fitness goals and increase the amount of active users.


5/18/2017

6

Fitbit’s key constraint is its size, with a

market cap of $1.25 billion, it is one of the smallest producers in

the industry

Cost of goods sold is currently 61.0% Sales

and Marketing is 22.6% of revenue

Past declines in stock prices has negatively affected Fitbit’s ability

to raise capital


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2,169,461,000.00

Costs

General andAdministrative

Sales andMarketing

Research andDevelopment

Cost of goods sold

Financial ConstraintsFitbit is constrained by its small size, past declines in stock price and make up of costs


(500.00)

‐

500.00

1,000.00

1,500.00

2,000.00

2,500.00

2014 2015 2016

Millions

Profit & Revenue

Revenue Profit Pre Tax

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2017 2018

Millions

Implementing Vs Staying on current Track

Revenue Revenue (With App) Profit Pre Tax (With App) Profit Pre Tax

The added value of the upgraded app will be

$77 million due in part to sharing data with

partners

Profits in 2016 fell 210% to $(110) million due to high inventory costs and low sales growth

ProfitFitbit’s upgraded app and privacy policy will increase revenue going forward



A key aspect of our decision was the

existing app infrastructure.

$32.02

$48.03

$39.30

$58.95

$‐

$20

$40

$60

$80

$100

$120

2017 2018

Millions

Cost

App Development Marketing Campaign

This program will increase marketing by 10% and R&D by 8%

Due to large cash reserves, Fitbit will use cash to pay for these

programs

CostsIn order to upgrade the app and market improved privacy features, Fitbit will have to spend $170 million over the next two years



A key aspect of our decision was the

existing app infrastructure.

$32.02 $48.03

$39.30

$58.95

$‐

$20

$40

$60

$80

$100

$120

2017 2018

Millions

Cost

App Development Marketing Campaign

This program will increase marketing by 10% and R&D by 8%

Due to large cash reserves, Fitbit will use cash to pay for these

programs

CostsIn order to upgrade the app and market improved privacy features, Fitbit will have to spend $170 million over the next two years


Key Takeaways

Constraints: Fitbits size is a challenge as it makes it difficult to compete with the large players and raise capital.

Falling Profit: Negative profit in 2016 was caused by high inventory costs and lower than expected sales growth

Added Value: Expected value added over a two year period is $77 million.


5/18/2017

7

Units ‐ MonthsApp 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19ConceptDesignDevelopment TestingUpdate ImplementMaintaining

Marketing ConceptDesignDevelopment TestingUpdate Implement

2017 2018

32,019,100 48,028,650

58,950,60039,300,400

Sources: Fitbit 10-k Annual Report, Ivey Publishing

ImplementationFitbit will focus on implementing both programs within the first year and then switch to maintenance


Asia Pacific RegionFalling revenue is due to loss of market share in the region

Sources: Company Website, Company Analysis

0.44 0.430.46

0.35 0.35

0.243

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

FITBIT ‐ MARKET SHARE

Over a 1 year period Fitbit has dropped from 43% to

24% market share

Poor product differentiation


Asia Pacific RegionFalling revenue is due to loss of market share in the region

Sources: Company Website, Company Analysis

Must pivot away from emphasis on short-term sales and fast growth and into long-term & sustainable growth

Corporate Customers Strategic Partnerships

Respond to current and future dynamic market conditions and become a more agile company


10 Corporate Clients with multiple locations

spanning 13 countries

Corporate Clients Geographic OutreachLeveraging the geographic presence of corporate clients will allow Fitbit to spread brand awareness



5/18/2017

8

Leverage existing sales

channels

Receive direct access to the global target market

Nurturegrowing brand

awareness

Harness word-of-mouth

marketing

Easy and direct access to our growing consumer base through leveraged corporate customer relations

Corporations will be able to spread awareness of Fitbit through Asia PacificCorporate Clients Geographic Outreach



Members receive discountson wearable fitness trackers & save 25%

on premiums

Global PartnershipsFocusing on global partnerships will lay the foundations for long-term value creation



Build global brand

equity

Cultivatepositive brand associations

Alignproducts with

shifting consumer demand

Solidifylong‐term growth

opportunities

Deliberate brand curation and strategic partnerships to lay the foundations for future growth

Working with global partners will promote overall brand awarenessGlobal Partnerships



Fitness Industry $20 M (segment)CAGR = 12.7% (2017-2021)Market Volume = $12 M (2017)

8 Brands (Fitbit, Pebble, Applewatch with over 50 models dominate the market)

Aging population, by 2050 the number of people aged 65-84 will more than double

4.8 M smartphone users by 2021Increase from 3.8 M in 2014 Emphasis on high-tech & apps

20% specifically want to buy a fitness tracker for heart rate monitoring

FOCUS: Versatility for Vitality


31

In order to gain market share, Fitbit should emphasis on high-tech hardware and software

Singapore

OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY

5/18/2017

9

170 M devices by end 2017 Annual growth rate = 41%

Most significant growth in fitness industry for companies addressing obesity & senior health problems

Aging population, by 2050 the number of people aged 65-84 will more than double

18.8 M smartphone users by 2021Increase from 15 M in 2015

20% currently track20% have previously tracked60% have never tracked

FOCUS: Wearables for Wellness


32

In order to gain market share, Fitbit should provide health and wellness technology

Australia


Wearables Market Worth = $1.1B CAGR = 13.1% (2017-2021)

DOMESTIC COMPETITORS50% of market captured by Xiaomi, Lifesense, Okii with low-cost wearables

Middle class of 1 billion people by 2030 Disposable income growth by 90%

Smartphone usage to 52.77% (2021)Growth of approximately 15%

45% currently track16% have previously tracked39% have never tracked

FOCUS: Application of Wearables


33

In order to gain market share, Fitbit should highlight software and service in order to differentiate

China


Source: Company Website

Asia Pacific RegionLeveraging the geographic presence of current partners and corporate clientsKey Takeaways

Global Companies: Fitbit can leverage its existing global customers to penetrate into the Asia Pacific market

Strategic Partnerships: Strategic partnerships with heath and insurance companies will differentiate Fitbit, creating brand equity today, while laying the foundation for growth in the future

Marketing: Tailored marketing strategies for key global markets will be vital for increasing and maintaining future market share


We intend to open a line of credit in order to decrease the risk associated with using

cash for the app development and

advertising campaign

We are mitigating global risk by leveraging key

partnerships in Asia

We are adding multifactor

authentication and enhanced security to

decrease risk of hacking

Product Malfunction risk will be reduced through extensive product testing to

insure quality, which will reduce the

potential for recalls and other warranty

expenses

Sources: Fitbit 10-k Annual Report, Ivey Publishing

Financial Hacking Global Product

Risk and MitigationCorporations will be able to spread awareness of Fitbit through Asia Pacific


5/18/2017

10

36

Overall Summary

Industry Privacy FinancialSecurity Global

The EU’s new General Data

Protection Regulations provide more stringent laws for companies

to enhance protection for consumers.

Customers will have the ability

to save and share their fitness data

based on the categories they

select.

Fitbits size is a challenge, this

makes it difficult to

compete with the large

players and raise capital.

Implement world class security by

leveraging new technologies and tougher

security practices

Fitbit can leverage its

existing global customers to penetrate into

the Asia Pacific market.

Marketing Plan


Your Workout. Your Data. Your Choice.

Questions

38

Presentation SlidesPathway

General Market Conditions

General Market Conditions: Future

Competitive LandscapeChanging Technology

TakeawaysCustomer Wants

US LawsEU Laws

TakeawaysPrivacy and Security

Privacy

What Users Can SaveWhat Users Can Share

User Data SecurityEarn Bits

Fitbit ResearchMarketingTakeaways

Financial ConstraintsProfitsCosts

TakeawaysImplementation

Asia Pacific Region

Asia Pacific PlanCorporate Clients

Corporate Client Benefits

Global Partnerships

Global Partnership Benefits

SingaporeAustralia

China

Risk and MitigationSummaryAppendix

Global Wearable Sales Global Wearable Sales/Product

Overall Global Sales

Wearable Unit Shipments

Active Users

Income Statement

People who Track DataCompetitor Policy

SWOTFitbit and Medtroic

Upgrade Costs

Australian Fitness Industry

Smartphones in ChinaOperating Systems in China

Projected RevenueHealthcare Projected Revenue

Australia Fitness Tracking

China Fitness Tracking

Corporate ClientsCorporate Clients cont.

Takeaways

5.39

13.36

17.65

4.08

3.28

1.98

5.93

14.02

23.12

0

5

10

15

20

25

30

35

40

45

2015 2018 2021

Sal

es in

billi

on U

.S. d

olla

rs

Smartwatches Sports, fitness and wellness trackers* Others**

Wearables sales revenue worldwide by category from 2015 to 2021 (in billion U.S. dollars)

Appendix: Wearable Sales Revenue Worldwide

39

5/18/2017

11

19%22%

5%

22%

31%30%

12%

50% 47% 81%

47%

30%

1% 2% 1%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Western Europe North America Developed APAC China

Sha

re o

f sal

es

Wrist sports computers Health & fitness trackers Smartwatches (SIM + No SIM) Locators Others

Share of wearables sales by product category and region worldwide in 2015

Appendix: Wearable Sales by Product and Region

40

Wearable device sales revenue worldwide from 2015 to 2021 (in billion U.S. dollars)

12.33

18.04

26.83

38.84

53.62

72.27

95.27

0

20

40

60

80

100

120

2015 2016* 2017* 2018* 2019* 2020* 2021*

Rev

enue

in b

illion

U.S

. dol

lars

Appendix: Wearable Sales Revenue Worldwide

41

Forecast wearables unit shipments worldwide from 2014 to 2021 (in millions)

28.8

81.9

102.4

132

157.9

185

213.6

237.5

0

50

100

150

200

250

2014 2015 2016 2017* 2018* 2019* 2020* 2021*

Uni

t shi

pmen

ts in

milli

ons

Appendix: Wearable Unit Shipments

42

‐

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

2014 2015 2016

Devices

Devices sold Active Users

Registered device users Linear (Devices sold)

Linear (Active Users)

Over time the number use of wearable has

been degrading. Users lose motivation and stop

using there devices

Using current active users and registered devices we hope to capture at least 20

million users during the first year

Appendix: Active Users

43

5/18/2017

12

Year 1 Year 2 Data Sharing revenue ‐$ 460,841,940.00$ App Development 32,019,100.00$ 48,028,650.00$ Marketing Campaign 39,300,400.00$ 58,950,600.00$ Cost of rewards program ‐$ 177,246,900.00$

Partnering with health companies and using data 460,841,940.00$ 30% margin

Capture Rate Users CapturedCurrent Active Users of Fitbit 23,238,000.00 50% 11,619,000.00 Current Nonactive Users of Fitbit 26,917,000.00 30% 8,075,100.00

19,694,100.00

Expectation Cost/1000 Steps Steps/Day in thousands Users Rewards/Customer Monthly Rewards Annual Rewards Percent cost to FitBit Cost to FitBitBest 0.01$ 5 19,694,100 1.5 29,541,150.00$ 354,493,800.00$ 30% 106,348,140.00$ Expected 0.01$ 5 19,694,100 1.5 29,541,150.00$ 354,493,800.00$ 50% 177,246,900.00$

0.01$ 10 19,694,100 3 59,082,300.00$ 708,987,600.00$ 30% 212,696,280.00$ Worst 0.01$ 10 19,694,100 3 59,082,300.00$ 708,987,600.00$ 50% 354,493,800.00$

Using existing R&D infastructure adding 8% budget to R&D

Using existing marketing infastructure adding 10% budget to marketing

Recommend using cash to finance this new R&D due to the large amount in reserves 301 million plus

Appendix: Upgrade Costs

44

Appendix: Income Statement

2017 Percentage 2018 PercentageRevenue 2,082,682,560.00 100.00% 1,999,375,257.60 100.00%Cost of goods sold 1,072,655,533.30 51.50% 1,029,749,311.96 51.50%Gross Profit 1,010,027,026.70 48.50% 969,625,945.64 48.50%Operating Expenses 619,722,030.67 29.76% 594,933,149.44 29.76%Profit Pre Tax 390,304,996.04 18.74% 374,692,796.20 18.74%

Projection without New Application

2017 Percentage 2018 PercentageRevenue (With App) 2,082,682,560.00 100.00% 2,585,178,151.20 100.00%Cost of goods sold 1,072,655,533.30 51.50% 1,249,902,433.30 48.35%Gross Profit 1,010,027,026.70 48.50% 1,335,275,717.90 51.65%Operating Expenses 691,041,530.67 33.18% 811,841,611.28 31.40%Profit Pre Tax (With App) 318,985,496.04 15.32% 523,434,106.62 20.25%

With New Appication

2014 Percentage 2015 Percentage 2016 PercentageRevenue 745,433,000.00 100.00% 1,857,998,000.00 100.00% 2,169,461,000.00 100.00%Cost of goods sold 387,776,000.00 52.02% 956,935,000.00 51.50% 1,323,577,000.00 61.01%Gross Profit 357,657,000.00 47.98% 901,063,000.00 48.50% 845,884,000.00 38.99%Operating Expenses 199,728,000.00 26.79% 552,865,000.00 29.76% 958,349,000.00 44.17%Profit Pre Tax 157,929,000.00 21.19% 348,198,000.00 18.74% (112,465,000.00) ‐5.18%

Current Income Statement

45

Appendix: People that Track Fitness Data

101.23

108.74111.67 110.1

114.07111.36

116.7 117.35112.58

109.83

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Num

ber o

f par

ticip

ants

in m

illion

s

Source: Outdoor Foundation; ID 191984

Further information regarding this statistic can be found on page 8.Note: United States; 2006 to 2015; 6 years and older; 32,658 (15,167 individual & 17,491 household surveys)

46

Fitbit Apple Samsung Xiaomi Garmin Jawbone

Sensitive Information

Limits on Collection and Use

Meaningful Disclosure

Limited Sharing

Consumer Access to Data

Transparent

Anonymization

Usability testing

Fair marketing practices

Current CompaniesNo company emerges as a leader for security and privacy policy


Appendix: Competitor’s Current Privacy Policies

47

5/18/2017

13

SWOT AnalysisFitbit thrives in the middle market for customers who want a mix of lifestyle and fitness

SWOT

• Variety: Fitbit offers a large variety of fitness trackers at a variety of price points

• Software: Fitbit’s app is the gold standard for fitness tracking

• First in Market: Fitbit was one of the first fitness trackers

• Motivation: Less than half than customers continue to wear the device after 6 months

• Scandal: The recall and hacking scandals have affected consumer confidence in the brand

• Expertise: Lack an infrastructure for building competitive smartwatches

• Competitors: Smartwatches are becoming more and more popular and other competitors are better suited to compete

• Smartphones: smartphones are now tracking fitness data directly on the phone

• Asia: As middle classes grow, there will be strong opportunities in Asia

• Corporate Sponsors: More and more companies offer discounts on health insurance for fitness tracker users


Current CompaniesNo company emerges as a leader for security and privacy policy

Appendix: SWOT Analysis

48

Description: Combined Fitbit and Medtronic technology to monitor glucose levels of individuals along with daily activities

Reasoning: 29 M Americans suffer from diabetes mainly due to sedentary habits and bad diet

Solution: iPro2 myLog app (Medtronic) connects with Fitbit app to access data. Medical Practitioners access iPro2 myLog app to retrieve patient activity information

Medical Practitioners = Growth Catalyst

Appendix: Fitbit and Medtronic Partnerships

49

Most significant areas for growth for the fitness industry according to clubs in Australia in 2014

50.4%

37.4%35.7%

32.6%30%

22.6% 21.7%18.7%

16.5%

9.6% 8.7% 7.4% 5.7%3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Sha

re o

f res

pond

ents


50

Share of population in China** that use a smartphone from 2015 to 2021

Source: Statista DMO; ID 321482

38.17%40.86%

43.48%46%

48.41%50.67%

52.77%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2015 2016* 2017* 2018* 2019* 2020* 2021*S

mar

tpho

ne u

sers

as

shar

e of

pop

ulat

ion


51

5/18/2017

14

Market share held by smartphone operating systems in China from 2013 to 2017, by month

Source: Kantar Worldpanel; ID 260418

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Jan'13

Mar'13

May'13

Jul'13

Sep'13

Nov'13

Jan'14

Mar'14

May'14

Jul'14

Sep'14

Nov'14

Jan'15

Mar'15

May'15

Jul'15

Sep'15

Nov'15

Jan'16

Mar'16

May'16

Jul'16

Sep'16

Nov'16

Jan'17

Mar

ket s

hare

Android BlackBerry iOS Windows Other


52

Wearable device sales revenue worldwide from 2015 to 2021 (in billion U.S. dollars)

Source: Tractica; ID 610447

12.3318.04

26.83

38.84

53.62

72.27

95.27

0

20

40

60

80

100

120

2015 2016* 2017* 2018* 2019* 2020* 2021*

Rev

enue

in b

illion

U.S

. dol

lars


53

Healthcare wearable device sales revenue worldwide from 2015 to 2021 (in million U.S. dollars)

Source: Tractica; ID 610433

105.27 344.59869.94

2,084.64

4,387.77

9,163.97

17,802.16

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2015 2016* 2017* 2018* 2019* 2020* 2021*

Rev

enue

in m

illion

U.S

. dol

lars


54


55

5/18/2017

15


56

Corporate Clients Geographic ReachAsia Pacific Region

Adobe Autodesk BP Cerner Diageo

ChinaJapanKoreaIndiaHong KongSingapore

Singapore AustraliaChinaIndiaIndonesiaJapanMalaysiaNew ZealandPhilippinesSingaporeSouth KoreaThailandVietnam

Australia India Malaysia Singapore

AustraliaChinaHong KongIndonesiaIndiaJapanKoreaMalaysiaPhilippinesSingaporeTaiwanThailandVietnam


57

Corporate Clients Geographic Reach

Asia Pacific Region

McKesson NetApp Optum Pega Printpack

New Zealand ChinaHong Kong

AustraliaIndiaSingapore

AustraliaChinaIndiaJapanNew ZealandSingaporeThailand

ChinaIndia


58

Pathway to the Future of Fitbit - Foster School of Business · 2017-05-23 · Pathway to the Future...

Documents

Transcript of Pathway to the Future of Fitbit - Foster School of Business · 2017-05-23 · Pathway to the Future...