Apple and Nike have a common Competitor

They measure steps, calories and heart beats: The fitness bracelets of the start up company Fitbit (FIT) are desired. The IPO definitely in increased the heart beat rate of many investors.

The mainly for its fitness bracelets popular US company started strong on the stock market. The stock jumped 50% to $30.40 after market opening  on the Wall Street. Fitbit’s market cap increased therefor to over $6 billion.

Fitbit placed it’s stocks with the Ticker “FIT” at 20 Dollar. The company collected over 448 million Dollar after the IPO – almost a hundred million more than expected. The money is planned to be invested in research and development and possible investments in other companies. Investors, which invested in Fitbit a while ago are mainly financial institutions. They got more than 240 million dollar through stock sales.

Fitbit is increasing its product range. Latest updates where fitness bracelets with heart beat frequency measurement technology such as sport watch. In 2014 the company generated a profit of around 130 million USD with a revenue of 745 million USD. Since the start in 2007 Fitbit sold around 20 million fitness trackers to customers.

The long run success of such fitness accessories is questioned by several experts since the expected boom in smart watches did not come up yet well. The Apple Watch is also offering several fitness functions. Sceptics argue that fitness bracelets will be pushed out of the market on the long run by smart watches. The battery life and amount of functions smart watches have will increase and by that eat up the bracelet market as the smart phone ate up the navigation system and mp3 player markets. Fitbit’s mangement argues is big enough for different tools.

But the direct competiors of Fitbit are not small as well. Companies like Nike (NKE), Xiaomi, Garmin and Jawbone are investing large amounts in these markets as well. Jawbone just sued Fitbit after the IPO because of intellectual copy right violations..