The rise and fall of Fitbit

A $10 billion fitness tracker empire with 85% market share — crushed by a smartwatch and a $15 Chinese band.

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By The Numbers

$10B

peak valuation at IPO

85%

market share at peak

market share after 5 years

What They Nailed Early

Created an entirely new category — the fitness tracker — and built a cultural phenomenon. Shipped 20 million devices, hit 85% market share, and made 'Fitbit' synonymous with step counting. Built community by blogging struggles publicly during product development.

What Changed

Apple Watch arrived in 2015 as an ecosystem play, not a hardware competitor. Fitbit stayed a closed point solution while Apple integrated seamlessly with health apps and services. From below, China's Mi Band at $15 took 25% market share instantly. Fitbit got caught in no man's land — too expensive to compete on price, too limited to compete on features.

Where it Landed

Stock crashed 90% from peak. Google acquired them for $2.1B in 2019 — 80% below peak valuation. Founders left in 2024. Fitbit is now slowly dying inside Google's product line, a feature lost in reorganization.

The Principles

Hardware alone is a trap. Fitbit sold devices once; Whoop and Oura give hardware away and charge $30/month for insights — now worth billions.

Ecosystems beat point solutions. Apple Watch wasn't better hardware — it was an entry to apps, Siri, messages. Fitbit was a closed silo with nowhere to go.

First mover advantage expires fast. Creating a category buys time, not permanence. When Apple and $15 Chinese bands arrived, 85% share vanished in 5 years.

Builder's Takeaway

If you're building hardware, remember:

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Recurring revenue > one-time sales. Subscription models create predictable, high-margin businesses.

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Your product is either an ecosystem or it's getting absorbed by one.

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Category creation buys time, not immunity. Plan for the pincer movement from above and below.

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