Fitbit spent its first decade promoting exercise trackers. With its newest strikes, the corporate is beginning to look much less like a gear maker promoting dear equipment to health buffs and extra like a medical-device firm, catering to hospitals, sufferers, and well being insurers. The corporate’s business-to-business arm, known as Well being Options, is now addressing 4 well being situations—sleep problems together with sleep apnea, diabetes, cardiovascular well being and psychological well being—for employers, well being insurers, healthcare suppliers, and researchers.
Fitbit has offers with insurers like UnitedHealthcare, which pays its shoppers as much as $1,500 a yr for hitting step-count objectives. United has completed years of analysis to calculate its return on these payouts, says Fitbit CEO James Park. “The enterprise fashions are lastly catching as much as the information we’ve been gathering.” The following stage is so as to add in coronary heart price knowledge, he says.
Fitbit’s latest product, the Ionic smartwatch, makes use of a blood-oxygen sensor to display screen for sleep apnea and detect a sort of coronary heart arrhythmia. The corporate has accomplished medical trials on the use circumstances and is awaiting US Meals and Drug Administration approval. If it receives approval, Fitbits might change costly chest patch scanning to carry out preliminary screenings for atrial fibrillation on some sufferers, Park says. The corporate’s knowledge has been standard with most cancers researchers.
There are many causes behind the corporate’s transition: For one, Fitbit will all the time battle excessive abandonment charges. (“Fitbit? Extra like Quitbit,” The Atlantic as soon as quipped.) Fitbit’s gross sales of health trackers, and in flip, its inventory value, have mirrored that fatigue; income fell 22% final quarter and its inventory is buying and selling at a 77% low cost to its opening value in 2014. However most necessary, the corporate must differentiate its choices from the Apple Watch, which debuted in 2015 and has research that deal with a few of the similar areas Fitbit is chasing. Fitbit beat Apple within the third quarter by way of units shipped, taking 13.7% of the market, in response to IDC. Apple, which took 10.three% of the market, skilled a dramatic enhance in gross sales, whereas Fitbit continues its decline.
Fitbit believes its place as a impartial participant that works with any telephone makes it fascinating to insurance coverage firms and hospitals. Apple Watches solely work with iPhones; if an employer, hospital or insurer desires its shoppers to make use of them, it gained’t have the ability to attain individuals who have Android telephones.
Fitbit’s push into medication just isn’t with out dangers. Park agrees that over time the corporate’s merchandise will develop into a kind of medical gadget, however he’s reluctant to name them that outright. The corporate’s model is effective due to its affiliation with health and self-improvement, and client psychology is a crucial element in ensuring one thing like a step tracker is profitable, he says.
“There’s a dramatic distinction in client acceptance and engagement if you say, ‘Hey, here’s a medical gadget from Medtronic, go put on it,’ versus, ‘Right here’s a Fitbit, put on this as an alternative,’ ” Park says. “One is aspirational, the opposite implies that you simply’re sick. Shoppers simply go in with a special mentality primarily based on the way it’s portrayed and that’s really actually, actually necessary.”
That’s why Fitbit is taking part in a brand new FDA precertification program aimed toward digital well being merchandise, introduced in September. “The FDA acknowledges that there’s this probably new class of units that’s not a client gadget and never a standard medical gadget, however someplace in between, and that there must be a brand new regulatory pathway,” Park says. Fitbit’s rival, Apple, can also be a participant.