Fitbit (NYSE: FIT) launched their Ionic smartwatch yesterday and the stock spiked a little. Initial reactions have been positive, and there’s definitely a David and Goliath aspect to Fitbit’s efforts. The Verge has published a relatively positive piece on it.
I don’t own any FIT, but I would most assuredly not be comfortable buying it now – even on this recent news. Fitbit is playing right into Apple’s hands with this new smartwatch.
Indeed, the Ionic will be priced immediately at $299.95 which is higher than a Series 1 Apple Watch, which sells for $269. And of course, as soon as Apple announces its newest Apple Watch, the Series 3, on September 12th, the price of the current Series 2 Apple Watch will come down to the same price as the Fitbit Ionic, or perhaps even less. This makes every buyer of the Fitbit Ionic go through the mental math of deciding which is a safer bet with their $300 bucks.
Price isn’t the only issue… With the software it acquired from Pebble, Fitbit seems to be attempting to go head to head on all of the functionality of the Apple Watch as well, with an App Store (the Fitbit App Gallery) of its own offering health and medical apps, wireless connectivity, music and even payments. The Pebble/Fitbit SDK (software development kit) will allow developers to build native apps on the new Ionic. But given the choice of spending time developing apps for Apple, Android or Fitbit, which would most developers choose?
Fitbit has devotees, no question… But this is not David and Goliath. One rock is not going to fell the giant. Apple doesn’t NEED to make money on the Apple Watch, although I’m sure they do, because they are absolute experts at making money. Apple could afford to give the Apple Watch away for decades and it would never run out of cash.