When it comes down to it the wearable fitness tracker market has essentially no barrier to entry.
Can someone else make a similar device? Yes. Is there any reason someone has to use FitBit? No. Can someone else operate more efficiently? Probably. Does another company out there in the same space have better customer loyalty than FitBit? For sure.
This all spells major trouble for FitBit. Apple could easily achieve a much better economy of scale than FitBit and in the long run win a war of attrition. Even if Apple doesn't succeed in this space, the fact that the barriers to entry are low suggests that FitBit will never be wildly profitable. Any competitive advantage it currently has will not last.
Can someone else make a similar device? Yes. Is there any reason someone has to use FitBit? No. Can someone else operate more efficiently? Probably. Does another company out there in the same space have better customer loyalty than FitBit? For sure.
This all spells major trouble for FitBit. Apple could easily achieve a much better economy of scale than FitBit and in the long run win a war of attrition. Even if Apple doesn't succeed in this space, the fact that the barriers to entry are low suggests that FitBit will never be wildly profitable. Any competitive advantage it currently has will not last.