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JMP Securities: Fitbit's Biggest Competitor Is Apple, But There's Good News

JMP Securities: Fitbit's Biggest Competitor Is Apple, But There's Good News

Shares of wearables manufacturer Fitbit Inc (NYSE: FIT) spiked up more than 50 percent on its debut on the NYSE on Thursday. Alex Gauna, JMP Securities technology analyst, was on CNBC to weigh in Fitbit’s future prospects and the competition it faces from Apple Inc. (NASDAQ: AAPL).

Enormous Market Opportunity

"It is a market that is just getting started," Gauna began. "It’s an enormous market opportunity if you think about it in the context of roughly two billion smartphones that sell a year, and this sort of activity tracking fitness monitoring is a perfect companion type of device for those markets.

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

"Fitbit is a first mover in the space, and the good news for FitBit is that Apple hasn’t come out of the gate blazing with its Apple Watch."

Apple: The Real Challenge In The Long Run

Gauna was asked if investors should fear that Fitbit will lose its first-mover advantage in the long run, especially when cheaper Chinese wearables flood the market. He replied, "Well, within that time frame…I don’t think there’s a lot to fear for Fitbit. It’s a clear leader in the market obviously, with more than 11 million units sold last year."

He went on, "So, doing very well out of the gates and like I said, the good news is…Apple is not in this market with comparable performance in terms of either price points or integrated GPS or battery life.

"So, there’s a lot of room for Fitbit to maneuver within the next couple of years beyond that though, lot of challenges in competing with the iOS ecosystem and Internet of Things (IoT) power that Apple can bring," Gauna concluded.

Image Credit: Public Domain

Posted-In: Alex Gauna CNBC JMP SecuritiesAnalyst Color Media


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Infographic: Fitbit's Path To IPO