IHS Technology Questions Fitbit's Sustainability

Fitbit Inc FIT had a hugely successful IPO on Thursday with shares closing up more than 48 percent above its IPO price of $20. Ian Fogg, senior director of mobile and telecoms at IHS Technology, was on CNBC Friday to discuss the competition Fitbit faces from Apple Inc. AAPL and other wearable manufacturers. He also discussed how the company can sustain itself in the long-term.

Apple: A Significant Threat

Fogg was asked how big a threat is Apple for Fitbit. He replied, "Very significant. Fitbit has under 11 million active users at the end of 2014, Apple has 800 million."

He continued, "And it’s not just Apple. Other mobile handset makers are very active in wearables too, from Samsung, Huawei, Sony and many others."

Related Link: Fitbit CEO Says Company Is "More Than Just Wearables"

Dominant Position

On what he thinks Fitbit should do with the money it raised in the IPO, Fogg said, "I think what Fitbit has to do is establish a dominant position in the health and fitness market and explain why consumers need to have a dedicated device just for health and fitness, rather than a multi-function device like a smartwatch that can do health and fitness plus a bunch of other things as well."

Boost Now, But Sustainability An Issue

Fogg was also asked what he makes of Fitbit’s current valuation and the challenges the company faces. He replied, "This as a market is growing very strongly. We forecast round about 24 million health and fitness tracker globally, compared to about 36 million smartwatches. Dramatically up on the unit shipments in 2014.

Related Link: Can Fitbit Be An Apple-Like Innovator? This Early Investor Thinks So

"In such a growing market, there is optimism; the challenge for Fitbit is when a category is disrupted by an adjacent, like the iPhone disrupting the iPod, often you have a bounce. Apple has shipped more iPods since the iPhone went on sale than before, but now the iPod is very much in decline. Blackberry shipped more smartphones after the iPhone arrived than before.

"The challenge for Fitbit is they may have a boost now; can they sustain it into the long term?” Fogg asked.