Please ensure Javascript is enabled for purposes of website accessibility

Instant Analysis: Intel Corporation's Fitness Tracker Just Got Smarter

By Leo Sun - Apr 14, 2016 at 7:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Intel updates its fitness tracker, but can it catch up to market leaders Fitbit and Apple?

Intel (INTC -0.80%) recently updated its Basis Peak fitness tracker with new music control and workout features. iOS and Android users can now control the music playing on their mobile devices, as well as edit the type and duration of individual workouts.

Intel's Basis Peak. Image source: Intel.

Wait, Intel makes fitness trackers?
Some investors might be unfamiliar with the Basis Peak, which Intel released in late 2014 for $200. The device was manufactured by Basis Science, a wearable maker that Intel acquired earlier that year for $100 million. Prior to that buyout, Basis created the B1 Band, a heart rate-tracking device similar to Fitbit's (FIT) Charge HR.

Intel's purchase of Basis was part of the chipmaker's broader push into the wearables market. The company also partnered with SMS Audio to launch biometric earbuds, which measure a user's heart rate, created a $1,000 luxury bracelet called MICA with high-end retailer Opening Ceremony, and partnered with Fossil (FOSL -3.08%) to develop fashionable new fitness trackers and smartwatches.

Intel pushed into this market for two reasons. First, it wanted to ensure that ARM Holdings (ARMH) -- which marginalized Intel in the mobile market by licensing low-power chip designs to rival chipmakers -- didn't pull off a similar coup in the wearables market. Second, expanding into the wearables market enhances its growing Internet of Things (IoT) unit, which accounted for just over 4% of its 2015 sales. That percentage remains small, but Intel hopes that it can eventually offset stagnant growth in PC and mobile chip sales while feeding more information into its bigger data center business.

Is the Basis Peak just a showcase device?
IDC recently reported that Fitbit claimed nearly 30% of the global wearables market in the fourth quarter of 2015, followed by Apple (AAPL -2.46%) with 15% and Xiaomi with 10%. All three companies use custom or licensed ARM designs in their smartwatches and fitness trackers. Intel's Basis wearables weren't even mentioned in the report.

Therefore, it's likely that Intel is mainly selling the Basis Peak as a showcase device to encourage other device makers, like Fossil, to use its wearable chips. So, for now, a software update to the Basis Peak definitely won't move the needle for Intel, but investors should understand why the chipmaker wants to stay invested in the wearables market.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intel Corporation Stock Quote
Intel Corporation
INTC
$42.01 (-0.80%) $0.34
Apple Inc. Stock Quote
Apple Inc.
AAPL
$137.35 (-2.46%) $-3.47
ARM Holdings plc Stock Quote
ARM Holdings plc
ARMH
Fossil Group, Inc. Stock Quote
Fossil Group, Inc.
FOSL
$6.92 (-3.08%) $0.22
Fitbit, Inc. Stock Quote
Fitbit, Inc.
FIT

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.