I have been spending a lot of time lately researching the Internet of Things (IoT) lately as it is a hot topic for both my consulting clients and also for long-term investors. We’ve behaviorally segmented IoT into the Human IoT (HIoT) and the 
Industrial IoT (IIoT). One greenfield HIoT product segment that is getting a lot of attention these days are fitness wearables, which many believe will shortly be a 250M unit market. Three companies that currently dominate this attention are Nike, FitBit, and Jawbone, three very different companies. I have published an 18 page paper here, but will try to encapsulate our thinking below. The question is, who is currently best positioned to win in the fitness wearables market, Nike, FitBit or Jawbone?
The winners and losers in the fitness wearables market will be determined by companies that are able to establish themselves as true experts in health & fitness and become a trusted advisor on how to help their users reach personal health and/or fitness goals. This will require more complete tracking and a focus on Big Data analytics that turn data into meaningful insights.
So how do these companies stack up? The simplest way is to lay out a classic SWOT (Strengths Opportunities Weaknesses Threats) diagram. Again, if you want the deep dive, you can find that here. Here’s how Nike, FitBit and JawBone stack up:
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What is clear is that Nike is well positioned with their Nike+ integrated platform and community ecosystem. Nike’s great brand and expertise in fitness and athletics also puts them in a great position of credibility. Nike needs to continue to invest in innovative and broader tracking capabilities, provide better insights and heuristics with Big Data analytics, and HIoT integration into clothing and equipment to stay in a leadership position. Companies like Under Armour have a lot to do to catch up, but their recent $150M acquisition announcement of MapMyFitness is big step toward building a community based platform ecosystem. Jawbone & Fitbit have established great platforms with broad tracking capabilities and understanding that data insights is critical success factor. They will need to focus on continuing to build their user base and establish credibility as a fitness or health expert to lock out new entrants and play with establish fitness brands like Nike.
The health & fitness wearable market is still in its early stages. Long-term winners will be the companies that build a complete functional ecosystem and create strong trusted relationships with their community of users based off a consultative approach. It is clear that Nike is the current leader here and understands this. Nike has opportunity to dominate the sport performance segment as well. Jawbone and Fitbit have great head start as well and are building out a well-rounded complete experience. I expect some further consolidation like the acquisition of MapMyFitness by Under Armour to build an end-to-solution and weeding out of device or app companies that are not able to build a big enough user community fast enough.
You can find a deep dive, 18 page paper here if you want more information.
This column includes contributions from Brian Pitstick, guest analyst at Moor Insights & Strategy.