Garmin continues to deliver value to its investors and customers. Quarter after great quarter and pivot to wearables for Garmin (GRMN). Another dreadful quarter in ’19 for Fitbit. Time is running out for the wearables maker. As automotive GPS devices moved to the phone, Garmin moved to wearables and are outperforming a key rival, Fitbit (FIT). Reminiscent of the tortoise and the hare, Fitbit raced to the forefront of the wearables explosion, owning early market-share and cornering the market but couldn’t keep up with the competition.
Another great quarter and pivot to wearables for Garmin (GRMN). Another dreadful quarter in ’19 for Fitbit. Time is running out for the wearables maker. As automotive GPS devices moved to the phone, Garmin moved to wearables and are outperforming a key rival, Fitbit (FIT). Reminiscent of the tortoise and the hare, Fitbit raced to the forefront of the wearables explosion, owning early market-share and cornering the market but couldn’t keep up with the competition.
Consumer’s Fitbits began to break and brand loyalty eroded. Couple this with Fitbit’s lack of product innovation and inexpensive copy-cats flooding the oversaturated market. Fitbit was deemed a casualty of the wearable fitness fad thus starting their demise. The once-loyal customers replaced their devices with significantly cheaper knock-offs or higher quality builds like Apple, Samsung, and Garmin.
Why the success of Garmin? Their core competency, GPS devices, are powering more vehicles than ever. The pivot to wearables, utilizing their superior technology, is a win/win. While Fitbit ran too fast with (what appeared to be) no meaningful strategy, Garmin slowly built a reliable, premium brand. Their product line is varied; from their aforementioned GPS units to unique wearables that cater to both the outdoor enthusiast and health enthusiast. They have strong corporate leadership, high-quality product, and high customer satisfaction. These attributes and some marketing prowess have jettisoned them into the premium category with Samsung and Apple.
According to a Digital Trends Fitness Band Device Satisfaction Report in 2019, Garmin has climbed to #1 in customer satisfaction, winning praises for ease of use, customer service, durability, and reliability. While Samsung took the #2 slot, their branding and publicity hit from the (now distant) past regarding Note battery fiasco and indictment of their Vice-Chairman are no longer an issue.
Garmin’s pivot to wearables was slow and steady with quality and customer service at the forefront. Albeit, Fitbit may be going the way of GoPro. They were quick out of the gate but not prepared for the long race. Fitbit and GoPro may have created a device category and have become branding nouns. They will need to reinvent themselves to keep up with the competition in the categories they created.
With Google’s recent acquisition of Fitbit, can the band, stand the rebrand? Google has always acquired and not built. From Android to Youtube to Nest to Fitbit and so on. They do a decent job of incorporating these companies under the Google company umbrella but it usually takes years for them to figure it out. Having said this, Apple may be so far ahead of the curve in wearables that Google may have a difficult time catching up. Don’t count them out. This is going to be a long haul
Speaking of Apple. Watch out for Apple. They are investing heavily into the wearables health space with plans to make the iWatch a necessity in healthcare. Apple is slowly and quietly taking market share from all companies in the wearables technology arena and considered the #1 wearable technology in the space.