Nike, FitBit, Or Jawbone: Who Is Best Positioned To Win In Fitness Wearables?

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:

NIKE SWOT

Nike Strengths	Nike Weaknesses
Established & Credible Brand Strong Marketing & Sales Engine Large and Strong User Community Early Leader in Technology Platform Approach with Rich Ecosystem Strong Partnerships	Large Company Atmosphere Not a Technology Company Semi-closed Architecture Limited Tracking
Nike Opportunities	Nike Threats
Richer Tracking/Data Training/Coaching Advice Leverage Athlete/University Sponsorship Segment Expansion & Performance Leadership Connected Ecosystem Sensor-enriched Apparel Rumored Apple AAPL -0.25% iWatch Maintaining Simplicity	Rumored Apple iWatch Maintaining Simplicity

FITBIT SWOT

Strengths	Weaknesses
Nimble First Mover Advantage Great Technology & Value Platform Openness Broad Device Portfolio Corp Wellness/Affiliate Channel	Lack of Fitness/Health Credibility Brand Awareness
Opportunities	Threats
Build Richer Data Set/Tracking Build Dietary Expertise Big Data Analytics Investment Expand Corp Wellness & Affiliates Programs Data Monetization Position as Leader in Wellness New Tech Start-ups	New Tech Start-ups

JAWBONE SWOT

Strengths	Weaknesses
Early Mover Broad Tracking Analytics/Insights Brand Awareness & Channel	Lack of Health & Fitness Credibility Complex
Opportunities	Threats
Further Innovate on Tracking Expand Big Data Analytics Investment Build Corp Wellness & Affiliates Brand Confusion More Nimble Start-ups	Brand Confusion More Nimble Start-ups

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.