The NIH ‘All of Us’ Program Just Made Fitbit Inc Stock Stronger

NIH points to Fitbit popularity with consumers, longer battery life and wider smartphone compatibility

Fitbit Inc (NYSE:FIT) appears to be the clear favorite in the medical community. In a big boost for the company, the National Institutes of Health (NIH) will be providing up to 10,000 Fitbit devices to participants in its All of Us research program. This is the kind of endorsement that could help to boost Fitbit sales and eventually turn around floundering FIT stock.

The NIH ‘All of Us’ Program Just Made Fitbit Inc Stock Stronger
Source: National Institutes of Health

The news should give Fitbit a slight break, as it has been fighting for position with Apple Inc.’s (NASDAQ:AAPL) Apple Watch and trackers from China’s Xiaomi when it comes to popularity with consumers.

Fitbit sales are down and FIT stock is in the doldrums, but if the one-year trial is a success, NIH says Fitbit wearables “could be more broadly incorporated into the All of Us research program.” This should give the company a new sense of hope.

NIH Chooses Fitbit for All of Us

Fitbit sent out a press release announcing its fitness trackers had been chosen by the NIH for a year-long pilot as part of its All of Us research program. NIH will distribute 10,000 Fitbit Charge 2 and Alta HR trackers. The aim is to collect activity, sleep and heart rate data for the volunteers. That data will then be used by researchers in an attempt to better understand the relationship between lifestyle and health.

Why choose Fitbit over the Apple Watch — especially when Apple clearly has health applications in its sights?

Fitbit Is in With Medical Researchers

In the press release, the NIH noted that Fitbit devices are used more frequently than any other health trackers in biomedical research. That translates to over 470 published studies (89% of the total) and 95% of research funded by the NIH. That made Fitbit a natural choice for All of Us researchers.

Making the case even stronger is Fitbit’s popularity with consumers — notwithstanding marketshare struggles this year with Apple and Xiaomi.

The Director of the Scripps Translational Science Institute (the unit that will be distributing the fitness trackers) had this to say about the decision to choose Fitbit:

“The Fitbit devices selected track a combination of physical activity, sleep, and heart rate parameters … The popularity of Fitbit devices among millions of Americans, combined with their ease of use, including multi-day battery life and broad compatibility with smartphones, made Fitbit a natural choice for this pilot program.”

Can Fitbit Leverage This Win?

The timing of the All of Us announcement could not have been better for Fitbit.

The company has had a rough year. While FIT stock got a bit of a bump from the release of the Ionic –Fitbit’s first true smartwatch — it has been flat for months, and down 23% from the start of the year. Worse, FIT stock has plummeted 87% from just two years ago, a drop that coincides with the release of the Apple Watch.

Fitbit, Apple and Xiaomi are going into the holiday shopping season with their newest generation of devices, led by the Apple Watch Series 3 and Fitbit Ionic. Fitness trackers and smart wearables are popular gift choices — high tech and hip, but not nearly as expensive as something like a smartphone.

The All of Us announcement represents a big endorsement for Fitbit from NIH, a government institution that many Americans will trust more than the marketing material from competing fitness trackers. It doesn’t hurt that the announcement happens to touch on several of Fitbit’s key competitive advantages over the Apple Watch: long battery life and compatibility with many smartphones (not just the iPhone).

Even if consumers don’t care about the medical research community endorsing Fitbit for collecting data, having the NIH spike out battery life and smartphone compatibility is liable to make some potential Apple Watch buyers think twice. If nothing else, having an additional 10,000 Fitbit Charge 2 and Alta HR trackers in circulation is a good thing. And if the NIH decides after a year to distribute Fitbit devices more broadly to the 1 million+ All of Us participants, the program alone could move the needle on Fitbit sales.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/11/nih-all-of-us-program-made-fitbit-inc-fit-stock-stronger/.

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