Even as smartwatches continue to gain traction and take market share from basic fitness wristbands like Fitbit's (NYSE:FIT) Charge, Alta, and Flex devices, Fitbit is investing aggressively in the category. Today, Fitbit unveiled Charge 3, a new version of its highest-end fitness wristband.

"Charge 3 gives existing users a compelling reason to upgrade, while also allowing us to reach new users who want a sleeker, more affordable wearable in a tracker form factor," said Fitbit CEO James Park in a press release.

Two Fitbit Charge 3 devices

Fitbit Charge 3. Image source: Fitbit.

Can Charge 3 reinvigorate consumer demand for basic fitness wristbands?

Meet Charge 3

With a starting price of $149.95, the Charge 3 is an important addition to Fitbit's lineup, as it is the company's most advanced basic tracker device yet. A primary selling point for the new device is its touchscreen Corning Gorilla Glass 3 OLED display. Forty percent larger than the display its predecessor featured, the Charge 3's display offers an improved user experience while maintaining a price point well below Fitbit's Versa and Ionic smartwatches.

Other notable features include:

  • 15-plus goal-based exercise modes
  • Up to seven days of battery life
  • An aluminum casing
  • A redesigned software experience
  • Enhanced heart-rate-tracking technology
  • An SpO2 sensor that estimates blood oxygen levels
  • Water resistance up to 50 meters
  • Improved smart features for staying connected

The value proposition for Charge 3 is clear, according to Park: "With Charge 3, we are building on the success of our best-selling Charge franchise and delivering our most innovative tracker, offering an extremely slim, comfortable and premium design, along with the advanced health and fitness features our users want."

While Fitbit started accepting preorders for Charge 3 today, the device won't begin shipping until October, the company said.

Why Fitbit's Charge 3 is key

Some investors may wonder why Fitbit continues to invest in product development for its basic trackers. After all, IDC forecasts smartwatches will gain significant market share in the wearable device tracker market in the coming years as market share for basic wristbands falls from an estimated 36% in 2018 to just 23% in 2022. 

But Fitbit sees the glass as half full, noting basic trackers are still forecast to "comprise a significant portion of the overall wearables category for the next several years." It's also worth noting that Fitbit's Charge family of products is its most popular lineup, with 35 million devices sold so far.

It makes sense, therefore, for Fitbit to keep betting on basic fitness trackers.

Importantly, the product is launching at a critical time. Apple (NASDAQ:AAPL) is rumored to be unveiling a new version of its popular Apple Watch with a redesigned form factor as early as next month. Sales of the device have been surging, helping propel Apple's trailing-12-month other products revenue up 37% year over year. A new version of the Apple Watch will likely add to this momentum.

Fitbit investors seem to think the Charge 3 is a compelling product, as shares are up about 4% at the time of this writing.