Commentary

Fitbit Challenges Apple, Buys Watchmaker Vector

Putting more pressure on Apple's watch strategy, Fitbit just bought stylish smartwatch maker Vector for an undisclosed sum.

The deal comes on the heels Fitbit’s agreement to acquire the software team behind smartwatch startup Pebble.

With both deals, Fitbit continues to assemble an impressive talent roster, including some of the brightest minds in the smartwatch business.

By some measures, Fitbit already has Apple on the run. In the third-quarter, cheap fitness trackers have outsold Apple’s more technologically sophisticated smartwatch, according to a recent report from IDC. As such, Apple saw smartwatch sales decline 71%, year-over-year.

In the emerging wearables marketplace, consumers seem to prefer simplicity, according to Jitesh Ubrani, senior research analyst for IDC. “Where smartwatches were once expected to take the lead, basic wearables now reign supreme,” Ubrani noted in the report.

Basic wearables -- primarily comprised of fitness bands -- accounted for 85% of the market and experienced double-digit growth during the third quarter.

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Much of the increase was attributed to the launch of newer models, an expanding user base and an enticing summer season that allowed people to step out of their homes.

Why are consumers so hot on basics? “Simplicity is a driving factor,” Ubrani said.

Despite recent negativity surrounding the company's long-term strategy and stock price, Ubrani said he expected Fitbit to continue leading the pack in the near term.

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