With its Ionic smartwatch, Fitbit Inc (NYSE:FIT) looks poised to deliver the first device that’s a real monitor of multiple dimensions of people’s health. If it delivers as expected, Ionic will be a tremendous hit this holiday season and beyond, lifting FIT stock at least 400%-500% above current levels in the next three years.
Along with the coaching videos that it provides and its long battery life, Ionic should appeal to tens of million of athletes around the world and further differentiate it from Apple Inc.‘s (NASDAQ:AAPL) Apple Watch.
All of which makes FIT stock highly appealing at current levels, some 60% below prices last seen about a year ago.
My research did not show any evidence that the recently unveiled Apple Watch 3 — at a minimum of $329 versus Ionic’s $300 price tag — will monitor multiple, useful aspects of health to the extent that Ionic will.
I was also did not see any indications that Apple will provide coaching videos, as Fitbit will to augment the user experience. It also appears that the new Apple Watch’s battery life will be significantly shorter than the Ionic’s.
While current fitness trackers and smart watches, as well as the upcoming Apple Watch 3, allow users to monitor a few elements of their health such as their heart rate , heart rhythm, and sleeping patterns, the Ionic is different. In addition to heart rate and sleep patterns, it will directly stream data from a glucose monitoring device starting in 2018, allowing users to keep tabs on their blood glucose levels and will enable users to monitor their blood oxygen levels immediately. In the future, the device will be able to monitor sleep apnea, the company stated.
Ionic’s Coach feature will also induce many users to buy the device. For a very small additional fee of $40 per year, users will be given access to videos that explain and show how to perform different exercises.
Assuming that the service offers high quality instructions and many videos, it will be quite appealing to people who want to learn how to exercise better but aren’t willing or able to foot the bill for personal trainers or even classes. As I mentioned previously, I saw no evidence that Apple Watch 3 will provide similar videos.
Bottomline for FIT Stock
Ionic’s four-day battery life will also appeal to many users and differentiate it from Apple Watch 3, whose battery life is capped at 80 hours, i.e. three days and eight hours. For example, on a four day trip in the wilderness that involves hiking and camping, it would be quite handy to have a device whose battery could last the whole time.
Obviously, not every consumer who decides to buy a smart watch will purchase the Ionic. Most reviewers seem to agree that Apple Watch looks better than Ionic, so people who want a smartwatch but are mostly concerned with aesthetics will probably buy the Apple model. And individuals who are completely devoted to Apple will go for its smartwatch over the Ionic.
Finally, consumers who love the Apple Watch 3’s cellular capability and don’t mind its $399 price tag (and any additional fees charged by their carriers) will choose the tech giant’s product.
But just as Alphabet Inc‘s (NASDAQ: GOOGL) Android was able to gain a huge share of the market despite the popularity of the iPhone, Ionic will pick up a large chunk of the smartwatch market despite the popularity of Apple Watch, causing FIT stock to rally big time from its current depressed levels, at a price-to-sales ratio of just 0.85.
As of this writing, Larry Ramer owned shares of FIT stock.