A lot of Apple (NASDAQ:AAPL) smartphone owners were on the receiving end of Fitbit (NYSE:FIT) activity trackers over Christmas. Fitbit is trailing only Super Mario Run on top of Apple's App Store chart among free downloads for the iPhone as of Sunday night, a strong indicator that Fitbit was packed into a lot of stockings over the weekend.
It's obviously an encouraging sign for Fitbit shareholders. They've seen their stock plummet 75% this year. Fitbit stock hit a new all-time low on Friday. Slowing sales and concerns that Fitbit devices are collecting dust on retailer shelves have scared investors away, but heavy download activity among iPhone owners suggest that this is not the case.
Fitbit wasn't a winner across all app marketplaces. It was No. 44 on Google Play among free downloads, according to applications tracker App Annie. It isn't charting at all for the iPad. The disparity shouldn't come as a surprise. iPhone owners tend to be more affluent than Android users, affording them the ability to splurge on fitness trackers. The iPad isn't as portable as the iPhone, making it a better medium for games and video streaming.
Friends before enemies
Apple isn't usually played up as a Fitbit ally. Last year's arrival of the Apple Watch and this year's Series 2 update that incorporates built-in GPS could be drying up demand for Fitbit's dedicated activity monitors.
We also recently saw Apple try to make a play for the corporate wellness market that Fitbit seems to have cornered. Apple is hoping that companies will consider subsidizing Apple Watch purchases for their employees, a niche where Fitbit is winning over corporations looking to save money on healthcare costs.
A popular narrative is that Apple products make Fitbit products obsolete, but now we're seeing that iPhone owners are still flocking to Fitbit bracelets even as many slap Apple Watch devices around their wrists.
Instead of enemies or possibly even frenemies, each company could be rooting for the other to succeed. Fitbit's popularity with iPhone owners relative to Android jockeys has to find Fitbit hoping that iOS gains market share. Apple may obviously be hoping for its Apple Watch to become the activity tracker of choice, but Fitbit's appeal to iPhone owners can't be ignored. Fitbit may make more sense as an acquisition target than a competitor to target, especially with the beating that Fitbit stock has experienced over the past year.
There will be challenges for Fitbit. Margins have been contracting, and sales growth has been decelerating. However, after being written off for the holiday quarter, it seems as if Fitbit is showing signs of life -- at least in the realm of iPhones.