Fitbit (NYSE:FIT) has shipped some 1 million Versa smartwatches in a little over a month's time. That indicates it not only got its product right this time, but that it is finally also a worthy competitor to Apple (NASDAQ:AAPL).

It's not so much the number of smartwatches it sold that makes it a player now, though that certainly raises Fitbit's profile. Rather, it is the healthcare aspects of the devices and what they mean for the company's future.

Two smiling women with one wearing a Versa smartwatch

Women's health is the key to Fitbit becoming a competitive force. Image source: Fitbit.

The second time's the charm

After virtually creating the fitness tracker market, Fitbit has been eclipsed by the growth of smartwatches, which could do all that a fitness band could do and more. The Apple Watch has captured the wearables leadership position with a 16.1% share of the market, according to estimates by market intelligence firm IDC, while low-end fitness-band maker Xiaomi is second with a 14.8% share. Fitbit is third at just 8.7%.

Because it was late to the game, Fitbit rushed out its Ionic smartwatch in a bid to catch up. But the Ionic ultimately proved it wasn't ready for prime time. Undeterred, Fitbit came up with the Versa, its first mass-appeal smartwatch. It borrowed heavily from the design stylebook of Pebble, a popular smartwatch start-up Fitbit acquired last year. The response to the Versa has been so great that Fitbit says the smartwatch is expected to become its primary source of revenue in the back end of the year.

To your health

While the Versa's looks were vastly improved over the bulky Ionic, the real jewel was the inclusion of a health-tracking feature aimed at women that became available to all Fitbit app users last month. The device maker says more than 2.4 million users have already used it, suggesting this was something women are looking for. This gets into the larger reason why Fitbit is a viable rival to Apple now. The company sees itself as becoming a partner in a user's healthcare decisions.

Fitbit acquired Twine Health, a small healthcare start-up that partners with corporate wellness programs to help employees plan healthy lifestyles. It has also partnered with several major health insurers and signed deals covering data sharing, glucose monitoring, and other matters. Fitbit is aligned with Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google Cloud Healthcare API as an infrastructure partner, giving it a place to store data to connect with the electronic medical records systems used by health providers. Notably, Fitbit is one of only a handful of companies that the Food and Drug Administration chose to participate in its digital health pre-certification pilot program.

A rare endorsement

Fitbit's investments into healthcare led noted short-seller Andrew Left of Citron Research to issue a rare buy recommendation for the stock, which caused the company's shares to surge about 15% on the news.

As my colleague Rick Munarriz pointed out, these investments won't deliver profits right away, but should pay off in the years to come. Analysts figure Fitbit won't turn a profit for a few more years.

Of course, Apple isn't ignoring the healthcare arena, either. The new operating system for the Apple Watch unveiled at the company's recent Worldwide Developers Conference builds on its existing ability to track user health metrics and share data with doctors. It includes new health and wellness features, such as exercise tracking functions along with the option of challenging friends for competitions that could make these activities more fun.

While Apple is the industry leader, we really don't know how many smartwatches it sells because it doesn't disclose sales figures, like it does with iPods, iPads, and Macs. Analyst estimates suggest Apple shipped 4 million units in the first quarter.

Fitbit shipped over 1 million Versas in month or so, which means it is now a real contender. While the Versa is not likely an Apple Watch killer, Fitbit is now a true, viable competitor that can offer healthy additional growth.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.