FitBit Study

5/18/2017
Pathway to the Future of Fitbit
Your Workout. Your Data. Your Choice. START
GLOBAL
PRIVACY Summary
FINANCIAL
SECURITY
OVERVIEW
END
April 8th, 2017
Tyler Brown | Kayla Baczewski | Ethan Smith | Maya Donoghue OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 1
General Market Condition General Market Condition

The wearable market is highly saturated and growing fast There are large growth opportunities outside of the US and Europe but smart
watches will quickly overtake pure fitness trackers in popularity
Fitbit Xiaomi Garmin Samsung Jawbone Apple BBK Lifesense Other Western Europe Developed APAC China North America Other regions
120.0% By the end of 2016, 5 140
China and the Asian Pacific
100.0%
main players (Fitbit, 120
have grown significantly
Unit sales in millions

Share of shipments
100
80.0%
Xiaomi, Garmin, 80
since 2014 and will
60.0%
Samsung, and Apple) 60
continue to with growing
40.0%
made up over 60% of 40 populations and increasing
20.0%
shipments world wide 20 health awareness
0.0% 0
1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16 2Q '16 3Q '16 4Q '16 2014 2015 2016*
Smartwatch Health & fitness trackers Wrist sport computers Other wearables
1000
929 120.0%
900 835
The Industry as a whole 800
As the industry grows, 100.0%
Connected wearables in millions
722
is growing fast, 700

consumer preference will 80.0%
Share of unit sales

593
600
expecting to grow over 500 453
shift to smartwatches over
60.0%
185% of 930 million 400
325
fitness trackers as they get
wearable devices in 300 cheaper and have longer 40.0%
2021 200 battery life 20.0%

100
0 0.0%
Sources: Statista, Company Website 2016 2017* 2018* 2019* 2020* 2021* Sources: Statista, Company Website 2014 2015 2016* 2017* 2018*
OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 2 OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 3
1
5/18/2017
Competitive Landscape Changing Technology

Fitbit has more options at different price points than other brands Fitbit should invest in technology that will support the existing market
Smart Watch
Series 2 Create
Gear 3
Gear 2 Series 1 Frontier new
Market
Forerunner Fenix Smart Patch
35 Surge Chronos Smart Clothing
Charge 2 Blaze
Vivosmart
Features
HR
Mi Band 2 Gear Fit2
Alta HR
Minimal Radical
Ray Technology Technology
Change Blood Sugar Change
Alta Meditation
Tracking
Flex
Heart Rate Hydration
Pedometer
Flash Link
Accuracy Tracking
One
Battery Life Manage
Zip Existing
Design
Sources: Fitbit website, Misfit website, Xiaoma website, Garmin website, Samsung website, apple website Price Sources: Company Website, Wearables, Sports Illustrated, Business Insider
Market
Changing Technology Top Customer Concerns

Fitbit should invest in technology that will support the existing market Customer’s worry about how companies secure and use the data they gather
Key Takeaways
Create
new
Market Lack of Collection and Use
Smart Patch
Market Conditions: The global wearable is growing
Smart rapidly
Clothingwith Transparency of Data
extreme growth in the Asian markets. The market is highly saturated
and will start to become dominated by Apple and Samsung as 1 2
smartwatches gain popularity
Minimal Radical
Technology Technology 3 4
Technology Changes: Although there are lots of technology
Change
innovations upcoming in the market, Fitbit should focus
Meditation Sugar Change
Bloodon
Tracking
technologies that manage the existing market as well as focus on Use of Data for Data Security
their software Heart Rate Hydration Targeted Marketing
Accuracy Tracking
Battery Life Manage
Existing
Design
Sources: Company Website, Wearables, Sports Illustrated, Business Insider
Market Sources: Statista, Company Research, American University Study
2
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Data Protection in the US EU General Data Protection Regulation

Data Protection Laws are a patchwork between federal, state, and best practices EU Data Protection Laws are more stringent and comprehensive than the US
No Current General Federal Laws Comprehensive Data Protection Laws

Federal Trade Health Insurance Portability Best Practices Expanded Territorial Reach Data Protection Officers Fair Processing Notices
Commission Act and Accountability Act
A company outside the EU Companies must Data controllers must
Prohibits unfair or HIPPA regulated medical The FTC Fair Information that is targeting designated a Data provide transparent
deceptive practices such information, focused on Practice Principles consumers in the EU will Protection Officer in information to data subjects
as failure to protect data, individually identifiable represent widely accepted be subject to GDPR certain circumstances when data is obtained
change privacy policy health and medical concepts. They focus on Accountability and Privacy
Data Processors Consent Best Practices
without adequate notice, information. HIPPA notice, awareness, choice,
and failure to comply with regulated the use and consent, access, Data Processors have A data subject’s consent Data Controllers must
posted policy. Principles disclosures of such participation, integrity, direct obligations to to processing personal demonstrate compliance
are voluntary in nature information security, and enforcement maintain a written record, data must be as easy to by maintaining certain
designate a data withdraw as to give documentation, and
Various State Laws protection officer, and consent. Data subjects implementing data
California State Law notify the controller on have the right to object to protection
becoming aware of a personal data being used
The California Online Privacy Protection Act requires a commercial website to conspicuously personal data breach for direct marketing
post its privacy policy on its websites and deals with the use of personally identifiable
Sources: Thomson Reuters, FTC Website
information taken through the internet. Sources: Allen and Overy
EU General Data Protection Regulation Privacy and Security

EU Data Protection Laws are more stringent and comprehensive than the US Fitbit needs to position themselves as a leader in privacy and security
Comprehensive Data Protection Laws

Watch
Expanded Territorial Reach Key Takeaways
Data Protection Officers Fair Processing Notices
A company outside the EU Companies must Data controllers must Complete customization
that is targeting designated a Data provide transparent with enhanced privacy
consumersUnited States:
in the EU willThe Protection
US has very little federal oversight into how
Officer in information to data subjects
companies
be subject to GDPR protect the data they get from consumers Privacy settings
certain circumstances when data is obtained
European
Data Union:
Processors The EU’s new General Data Accountability
Consent Protection and Privacy
Best Practices Increased security to
Regulations
Data Processors haveprovide more
A datastringent laws for companies
subject’s consent in order
Data Controllers to
must protect customer data
provide more
direct obligations to protecttoforprocessing
consumers personal demonstrate compliance Security from hacking
maintain a written record, data must be as easy to by maintaining certain
designate a data There is notwithdraw
Overall: as to in
clear leader give documentation,
the wearable and
market in terms Earn redeemable bits
protection officer, and
of privacy consent.
and security policy.Data subjects implementing data for sharing data with
notify the controller on have the right to object to protection approved researchers
becoming aware of a personal data being used Bits
personal data breach for direct marketing
Current Future
Sources: Allen and Overy Sources: Statista, Company Website
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Privacy What Users Can Save

Customers have options to pick what they want to track and what they want to Customers will have control over which features Fitbit Save
share
By default no data is saved
Options to save metrics
By default sharing is off
Ability to change at any time
Saving Sharing
You choose what data is You choose who can see
recorded your data
Never Shared: • Friends
• Name • Family Steps Distance Floors Active Calories Heart Rate
• Location • Registered Doctors Traveled Climbed Minutes Burned
• Other personal • Fitbit Research
(Using aggregate de‐identification)
identifiable information
Sleep Duration Caloric Weight, Body SmartTrack Age Gender

Sources: Statista, Company Website and Quality
Sources: Company analysis Intake Fat, BMI
What Users Can Share User Data Security

Customers will have control over which features Fitbit is able to collect and share Data Security focuses on ensuring no one other than Fitbit and the customer can
data on access their data
Only share saved data
Option to share data
You choose who you share with
+
Ability to change at any time
Multifactor Data Protection
✓Fitbit Research | ✓Family & Friends | ✓Doctors Bluetooth LE External Audit Encryption Authentication Officer
Fitbit can use Fitbit should
Fitbit should Fitbit should Fitbit should
Bluetooth LE hire an external
develop new require a hire a data
technology to security audit
encryption multifactor protection
Distance Floors Active Calories ensure users team to
Steps Heart Rate technology login for users officer to
Traveled Climbed Minutes Burned cannot be routinely check
based on as well as oversee the
tracked by the integrity of
protecting data require users security of
utilizing a firewalls and
from wearable to change customers
random MAC other
devices passwords private data
address protection
once a year
Sleep Duration Caloric Weight, Body SmartTrack Age Gender software
and Quality
Sources: Company analysis Intake Fat, BMI Sources: Company analysis
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Earn Bits for Sharing Fitbit Research

Users can earn rewards for hitting certain step goals Data is used to create a healthier future for all
1000 steps earns 1 bit
Data used by: Data used for:
500 bits redeem for $5 gift card • Research centers • Heart disease research
or donate to charity • Insurance companies • Diabetes research
Competitions for addition bits • Universities • Obesity research
Challenge friends for their bits

All data is stored on Fitbit servers & users can delete their data at any time
Partnerships Partnerships
Sources: Company analysis Sources: Company analysis
Marketing a New Era of Privacy Marketing a New

KeyEra of Privacy
Takeaways
Marketing strategy will focus on Fitbit’s industry leading privacy and security Marketing strategy will focus on Fitbit’s industry leading privacy and security
policies policies
Marketing: Roll out the “Your Workout. Your Data. Your Choice”
program through numerous channels to educate consumers about
privacy and security which will increase demand for our products.
Privacy: Customers will have the ability to save and share their
Your WORKOUT Your DATA Your CHOICE Your WORKOUT Your DATA Your CHOICE
fitness data based on the categories they select. By default no
We let you choose the We let you choose
information is saved or shared. All data recorded is aggregated and the
We want to help you The data you create while features you want based We want to help you The data you create while features you want based
accomplish your fitness anonymized.
accomplish your fitness
using our technology is on your privacy settings. using our technology is on your privacy settings.
goals. That’s why we private, this is why we You can change your goals. That’s why we private, this is why we You can change your
have built the best fitness protect it like it is our own settings and delete your haveSecurity: Implement
built the best fitness world class security by leveraging
protect it like it is our own Bluetooth LE,
settings and delete your
tracking software and using world class security. data wherever and stronger
tracking encryption,
software and multifactor authentication,
using world class security. a new data protection
data wherever and
devices. whenever. devices.
officer, and external audits to ensure reliability and security. whenever.
Marketing Platforms Marketing Platforms
Bits: Bit rewards are used to keep customers motivated to reach their
desired fitness goals and increase the amount of active users.
Sources: Company analysis
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Financial Constraints Profit

Fitbit is constrained by its small size, past declines in stock price and make up of Fitbit’s upgraded app and privacy policy will increase revenue going forward
costs
Costs Profit & Revenue
2,500.00
Millions
100% General and Past declines in stock
Administrative 2,000.00
Profits in 2016 fell 210%
90% Sales and prices has negatively 1,500.00
Marketing
affected Fitbit’s ability to $(110) million due to
Research and 1,000.00
80%
Development to raise capital high inventory costs
500.00
70%
Cost of goods sold
and low sales growth
‐
60%
Fitbit’s key constraint 2014 2015 2016
(500.00)
is its size, with a
50% Implementing Vs Staying on current Track
market cap of $1.25 Revenue Profit Pre Tax
3,000.00
Millions
40% billion, it is one of the
2,500.00
30% smallest producers in
the industry
The added value of the 2,000.00
20%
upgraded app will be 1,500.00
10% Cost of goods sold is $77 million due in part to 1,000.00
0% currently 61.0% Sales sharing data with 500.00

2,169,461,000.00
and Marketing is 22.6% partners 0.00
of revenue 2017 2018
Sources: Statista, Company Website Sources: Statista, Company Website

Revenue Revenue (With App) Profit Pre Tax (With App) Profit Pre Tax
Costs Costs
In order to upgrade the app and market improved privacy features, Fitbit will have In order to upgrade the app and market improved privacy features, Fitbit will have
to spend $170 million over the next two years to spend $170 million over the next two years
Key Takeaways
Cost Due to large cash Due to large cash
$120 reserves, Fitbit will use reserves, Fitbit will use
Constraints: FitbitsCost
size is a challenge as it makes it difficult to
Millions
cash to pay for these cash to pay for these

$100 programs compete with the large players and raise capital.
$120
programs
Millions
$100
$80
$58.95
Falling Profit: Negative profit in 2016 was caused by high inventory
$80 $58.95
This program will costs and lower than expected sales growth This program will
$60
$60 increase marketing by $39.30
increase marketing by
$39.30 10% and R&D by 8% $40 10%period
Added Value: Expected value added over a two year and R&D by 8%
is $77
$40 $48.03
million.
$20
$32.02
$48.03 $‐
$20
$32.02 2017 2018
A key aspect of our App Development Marketing Campaign A key aspect of our

$‐
2017 2018 decision was the decision was the
App Development Marketing Campaign existing app existing app
infrastructure. infrastructure.
6
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Implementation Asia Pacific Region

Fitbit will focus on implementing both programs within the first year and then Falling revenue is due to loss of market share in the region
switch to maintenance
FITBIT ‐ MARKET SHARE
0.46
0.44 0.43
Units ‐ Months 2017 2018
0.35 0.35
App 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Concept
Design 0.243
Development
Testing
Update
Implement
Maintaining
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Marketing
Concept
Design
32,019,100 48,028,650
Development
Over a 1 year period Fitbit
Testing has dropped from 43% to
Update
Implement
24% market share
39,300,400 58,950,600
Poor product differentiation
Sources: Fitbit 10-k Annual Report, Ivey Publishing Sources: Company Website, Company Analysis
Asia Pacific Region Corporate Clients Geographic Outreach

Falling revenue is due to loss of market share in the region Leveraging the geographic presence of corporate clients will allow Fitbit to spread
brand awareness
Must pivot away from emphasis on short-term sales and fast

growth and into long-term & sustainable growth
10 Corporate Clients with
multiple locations
spanning 13 countries
Corporate Customers Strategic Partnerships
Respond to current and future dynamic market conditions and

become a more agile company
Sources: Company Website, Company Analysis Sources: Statista, Company Website
7
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Corporate Clients Geographic Outreach Global Partnerships

Corporations will be able to spread awareness of Fitbit through Asia Pacific Focusing on global partnerships will lay the foundations for long-term value
creation
Leverage Receive Nurture Harness Members receive discounts

on wearable fitness
existing sales direct access growing brand word-of- trackers & save 25%
channels to the global awareness mouth on premiums
target market marketing
Easy and direct access to our growing consumer base

through leveraged corporate customer relations
Global Partnerships Singapore

Working with global partners will promote overall brand awareness In order to gain market share, Fitbit should emphasis on high-tech hardware and
software
FOCUS: Versatility for Vitality
Build Cultivate Align Solidify

global brand positive brand products with long‐term Fitness Industry $20 M (segment) 20% specifically want to buy
equity associations shifting growth CAGR = 12.7% (2017-2021) a fitness tracker for heart
Market Volume = $12 M (2017) rate monitoring
consumer opportunities
demand 4.8 M smartphone users by 2021 8 Brands (Fitbit, Pebble,
Increase from 3.8 M in 2014 Applewatch with over 50
Emphasis on high-tech & apps
Deliberate brand curation and strategic partnerships models dominate the market)
to lay the foundations for future growth Aging population, by 2050 the number of

people aged 65-84 will more than double
8
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Australia China
In order to gain market share, Fitbit should provide health and wellness In order to gain market share, Fitbit should highlight software and service in order
technology to differentiate
FOCUS: Wearables for Wellness FOCUS: Application of Wearables
170 M devices by end 2017 20% currently track Wearables Market Worth = $1.1B 45% currently track
Annual growth rate = 41% 20% have previously tracked CAGR = 13.1% (2017-2021) 16% have previously tracked
60% have never tracked 39% have never tracked
Most significant growth in DOMESTIC COMPETITORS

18.8 M smartphone users by 2021 Smartphone usage to 52.77% (2021)
fitness industry for companies 50% of market captured by
Increase from 15 M in 2015 Growth of approximately 15%
addressing obesity & senior Xiaomi, Lifesense, Okii with
health problems low-cost wearables
Aging population, by 2050 the number of Middle class of 1 billion people by 2030
people aged 65-84 will more than double Disposable income growth by 90%
Asia Pacific Region Risk and Mitigation

Corporations will be able to spread awareness of Fitbit through Asia Pacific
Leveraging the geographic presence of current
partners and corporate clients
Key Takeaways
Global Companies: Fitbit can leverage its existing global
Financial Hacking Global Product
customers to penetrate into the Asia Pacific market
We intend to open a We are adding We are mitigating Product Malfunction
Strategic Partnerships: Strategic partnerships with heath and line of credit in order multifactor global risk by risk will be reduced
insurance companies will differentiate Fitbit, creating brand equity to decrease the risk authentication and leveraging key through extensive
today, while laying the foundation for growth in the future associated with using enhanced security to partnerships in Asia product testing to
cash for the app decrease risk of insure quality, which
development and hacking will reduce the
Marketing: Tailored marketing strategies for key global markets
advertising campaign potential for recalls
will be vital for increasing and maintaining future market share and other warranty
expenses
Source: Company Website
Sources: Fitbit 10-k Annual Report, Ivey Publishing
9
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Overall Summary
Your Workout. Your Data. Your Choice.
Industry Privacy Security Financial Global

The EU’s new Customers will Implement Fitbits size is a Fitbit can
General Data have the ability world class challenge, this leverage its
Protection to save and security by makes it existing global
Regulations
provide more
stringent laws
share their
fitness data
based on the
leveraging new
technologies
and tougher
difficult to
compete with
the large
customers to
penetrate into
Questions
for companies the Asia Pacific
categories they security players and
to enhance market.
select. practices raise capital.
protection for
consumers.
Marketing Plan
OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 36
Presentation Slides Financial Constraints Active Users

Profits
Pathway
Costs
Upgrade Costs Appendix: Wearable Sales Revenue Worldwide
General Market Conditions Takeaways Income Statement
Implementation
General Market Conditions: People who Track Data Wearables sales revenue worldwide by category from 2015 to 2021 (in
Asia Pacific Region
Future Competitor Policy billion U.S. dollars)
Asia Pacific Plan Smartwatches Sports, fitness and wellness trackers* Others**
Competitive Landscape SWOT 45
Corporate Clients
Changing Technology Fitbit and Medtroic 23.12
40
Corporate Client Benefits
Takeaways Australian Fitness Industry
Global Partnerships 35
Customer Wants
Global Partnership Benefits Smartphones in China
30
US Laws 14.02
Sales in billion U.S. dollars

Singapore Operating Systems in China
EU Laws 25
Takeaways Australia Projected Revenue

20
Privacy and Security China Healthcare Projected Revenue 1.98
Takeaways 3.28
17.65
Privacy Australia Fitness Tracking
15
5.93
Risk and Mitigation 13.36
What Users Can Save Summary 10
China Fitness Tracking 4.08
What Users Can Share Appendix
5
User Data Security Global Wearable Sales Corporate Clients 5.39
Earn Bits Global Wearable Sales/Product Corporate Clients cont. 0

2015 2018 2021
Fitbit Research Overall Global Sales

Marketing Wearable Unit Shipments
Takeaways 38 39
10
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Appendix: Wearable Sales by Product and Region Appendix: Wearable Sales Revenue Worldwide
Share of wearables sales by product category and region worldwide in Wearable device sales revenue worldwide from 2015 to 2021 (in billion
2015 Wrist sports computers Health & fitness trackers Smartwatches (SIM + No SIM) Locators Others U.S. dollars)
120.0% 120
1% 2% 1%
100.0% 100 95.27
50% 47% 30%
81%
80
Revenue in billion U.S. dollars

80.0%
72.27
Share of sales
47%
60
60.0% 53.62
30%
31% 38.84
40
40.0%
26.83
20 18.04
12.33
20.0% 22% 22%
19%
12%
0
5% 2015 2016* 2017* 2018* 2019* 2020* 2021*
0.0%
Western Europe North America Developed APAC China
40 41
Appendix: Wearable Unit Shipments Appendix: Active Users

Forecast wearables unit shipments worldwide from 2014 to 2021 (in
millions)
250
237.5
Over time the number
use of wearable has
213.6
been degrading. Users
200
185 Devices lose motivation and stop
60,000,000.00 using there devices
157.9
50,000,000.00
Unit shipments in millions
150
40,000,000.00
132
30,000,000.00
102.4 20,000,000.00 Using current active

100
81.9
10,000,000.00 users and registered
‐
2014 2015 2016
devices we hope to
50
Devices sold Active Users capture at least 20
Registered device users Linear (Devices sold)
28.8
Linear (Active Users)
million users during the
first year
0
2014 2015 2016 2017* 2018* 2019* 2020* 2021*
42 43
11
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Appendix: Upgrade Costs Appendix: Income Statement

Capture Rate Users Captured Current Income Statement
Current Active Users of Fitbit 23,238,000.00 50% 11,619,000.00 2014 Percentage 2015 Percentage 2016 Percentage
Current Nonactive Users of Fitbit 26,917,000.00 30% 8,075,100.00 Revenue 745,433,000.00 100.00% 1,857,998,000.00 100.00% 2,169,461,000.00 100.00%
19,694,100.00 Cost of goods sold 387,776,000.00 52.02% 956,935,000.00 51.50% 1,323,577,000.00 61.01%
Gross Profit 357,657,000.00 47.98% 901,063,000.00 48.50% 845,884,000.00 38.99%
Operating Expenses 199,728,000.00 26.79% 552,865,000.00 29.76% 958,349,000.00 44.17%
Expectation Cost/1000 Steps Steps/Day in thousands Users Rewards/Customer Monthly Rewards Annual Rewards Percent cost to FitBit Cost to FitBit
Profit Pre Tax 157,929,000.00 21.19% 348,198,000.00 18.74% (112,465,000.00) ‐5.18%
Best $ 0.01 5 19,694,100 1.5 $ 29,541,150.00 $ 354,493,800.00 30% $ 106,348,140.00
Expected $ 0.01 5 19,694,100 1.5 $ 29,541,150.00 $ 354,493,800.00 50% $ 177,246,900.00
$ 0.01 10 19,694,100 3 $ 59,082,300.00 $ 708,987,600.00 30% $ 212,696,280.00
Worst $ 0.01 10 19,694,100 3 $ 59,082,300.00 $ 708,987,600.00 50% $ 354,493,800.00 Projection without New Application
2017 Percentage 2018 Percentage
Revenue 2,082,682,560.00 100.00% 1,999,375,257.60 100.00%
Partnering with health companies and using data $ 460,841,940.00 Cost of goods sold 1,072,655,533.30 51.50% 1,029,749,311.96 51.50%
30% margin Gross Profit 1,010,027,026.70 48.50% 969,625,945.64 48.50%
Operating Expenses 619,722,030.67 29.76% 594,933,149.44 29.76%
Year 1 Year 2 Profit Pre Tax 390,304,996.04 18.74% 374,692,796.20 18.74%
Data Sharing revenue $ ‐ $ 460,841,940.00
App Development $ 32,019,100.00 $ 48,028,650.00
Marketing Campaign $ 39,300,400.00 $ 58,950,600.00 With New Appication
Cost of rewards program $ ‐ $ 177,246,900.00 2017 Percentage 2018 Percentage
Revenue (With App) 2,082,682,560.00 100.00% 2,585,178,151.20 100.00%
Cost of goods sold 1,072,655,533.30 51.50% 1,249,902,433.30 48.35%
Using existing R&D infastructure adding 8% budget to R&D Gross Profit 1,010,027,026.70 48.50% 1,335,275,717.90 51.65%
Operating Expenses 691,041,530.67 33.18% 811,841,611.28 31.40%
Profit Pre Tax (With App) 318,985,496.04 15.32% 523,434,106.62 20.25%
Using existing marketing infastructure adding 10% budget to marketing
Recommend using cash to finance this new R&D due to the large amount in
reserves 301 million plus
44 45
Appendix: People that Track Fitness Data Current

Appendix:Companies
Competitor’s Current Privacy Policies
No company emerges as a leader for security and privacy policy
140
Fitbit Apple Samsung Xiaomi Garmin Jawbone
Sensitive
120 116.7 117.35
111.67
114.07
111.36 112.58 Information
108.74 110.1 109.83
101.23 Limits on
100 Collection and Use
Number of participants in millions
Meaningful
Disclosure
80
Limited Sharing
60
Consumer Access
to Data
40 Transparent
Anonymization
20
Usability testing
0
Fair marketing
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 practices
Note: United States; 2006 to 2015; 6 years and older; 32,658 (15,167 individual & 17,491 household surveys)
Further information regarding this statistic can be found on page 8.
Source: Outdoor Foundation; ID 191984 Sources: Statista, Company Website
46 47
12
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Current
SWOT Analysis
Companies
Appendix: SWOT Analysis Appendix: Fitbit and Medtronic Partnerships
No company
Fitbit thrives in
emerges
the middle
as amarket
leaderfor
forcustomers
security and
whoprivacy
want apolicy
mix of lifestyle and
fitness
• Variety: Fitbit offers a large • Motivation: Less than half than
variety of fitness trackers at a customers continue to wear the device Description: Combined Fitbit and Medtronic technology to
variety of price points after 6 months monitor glucose levels of individuals along with daily activities
• Scandal: The recall and hacking
• Software: Fitbit’s app is the gold
scandals have affected consumer
standard for fitness tracking confidence in the brand Reasoning: 29 M Americans suffer from diabetes mainly due to
• First in Market: Fitbit was one of • Expertise: Lack an infrastructure for sedentary habits and bad diet
the first fitness trackers building competitive smartwatches
Solution: iPro2 myLog app (Medtronic) connects with Fitbit app
SWOT to access data. Medical Practitioners access iPro2 myLog app to
• Asia: As middle classes • Competitors: Smartwatches
grow, there will be strong are becoming more and more
retrieve patient activity information
opportunities in Asia popular and other competitors are
• Corporate Sponsors: More and better suited to compete Medical Practitioners = Growth Catalyst
more companies offer discounts • Smartphones: smartphones are
on health insurance for fitness now tracking fitness data directly
tracker users on the phone
Sources: Company analysis
48 49
Appendix: Fitbit and Medtronic Partnerships Appendix: Fitbit and Medtronic Partnerships
Most significant areas for growth for the fitness industry according to Share of population in China** that use a smartphone from 2015 to 2021
clubs in Australia in 2014
60.0% 60.0%
50.4% 52.77%
50.0% 50.67%
50.0% 48.41%
46%
Smartphone users as share of population

43.48%
Share of respondents
40.0% 37.4% 40.86%

35.7%
32.6% 40.0% 38.17%
30%
30.0%
22.6% 21.7% 30.0%
18.7%
20.0% 16.5%
9.6% 8.7%
10.0% 7.4% 20.0%
5.7%
3%
0.0% 10.0%
0.0%
2015 2016* 2017* 2018* 2019* 2020* 2021*
Source: Statista DMO; ID 321482
50 51
13
5/18/2017
Market share held by smartphone operating systems in China from 2013 Wearable device sales revenue worldwide from 2015 to 2021 (in billion
to 2017, by month U.S. dollars)
Android BlackBerry iOS Windows Other 120
120.0%
100 95.27
100.0%
Revenue in billion U.S. dollars

80
72.27
80.0%
Market share
60 53.62
60.0%
38.84
40.0% 40
26.83
20.0% 18.04
20
12.33
0.0%
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan 0
'13 '13 '13 '13 '13 '13 '14 '14 '14 '14 '14 '14 '15 '15 '15 '15 '15 '15 '16 '16 '16 '16 '16 '16 '17 2015 2016* 2017* 2018* 2019* 2020* 2021*
Source: Kantar Worldpanel; ID 260418 Source: Tractica; ID 610447
52 53
Healthcare wearable device sales revenue worldwide from 2015 to 2021
(in million U.S. dollars)
20000
17,802.16
18000
16000
Revenue in million U.S. dollars
14000
12000
10000 9,163.97
8000
6000
4,387.77
4000
2,084.64
2000
869.94
105.27 344.59
0
2015 2016* 2017* 2018* 2019* 2020* 2021*
Source: Tractica; ID 610433
54 55
14
5/18/2017
Appendix: Fitbit and Medtronic Partnerships Appendix:

CorporateFitbit andGeographic
Clients Medtronic Partnerships
Reach
Asia Pacific Region
Adobe Autodesk BP Cerner Diageo
China Singapore Australia Australia India Australia
Japan China Malaysia China
Korea India Singapore Hong Kong
India Indonesia Indonesia
Hong Kong Japan India
Singapore Malaysia Japan
New Zealand Korea
Philippines Malaysia
Singapore Philippines
South Korea Singapore
Thailand Taiwan
Vietnam Thailand
Vietnam
56 57
Appendix:
CorporateFitbit andGeographic
Clients Medtronic Partnerships
Reach
Asia Pacific Region
McKesson NetApp Optum Pega Printpack
New Zealand China Australia Australia China

Hong Kong India China India
Singapore India
Japan
New Zealand
Singapore
Thailand
58
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5/18/2017

Pathway to the Future of Fitbit

Your Workout. Your Data. Your Choice. START

Tyler Brown | Kayla Baczewski | Ethan Smith | Maya Donoghue OVERVIEW | PRIVACY | SECURITY | FINANCIAL | GLOBAL | SUMMARY 1

General Market Condition General Market Condition

Unit sales in millions

is growing fast, 700

Share of unit sales

2021 200 battery life 20.0%

Competitive Landscape Changing Technology

Changing Technology Top Customer Concerns

Data Protection in the US EU General Data Protection Regulation

No Current General Federal Laws Comprehensive Data Protection Laws

EU General Data Protection Regulation Privacy and Security

Comprehensive Data Protection Laws

Privacy What Users Can Save

Sleep Duration Caloric Weight, Body SmartTrack Age Gender

What Users Can Share User Data Security

Earn Bits for Sharing Fitbit Research

Challenge friends for their bits

Sources: Company analysis Sources: Company analysis

Marketing a New Era of Privacy Marketing a New

Financial Constraints Profit

10% Cost of goods sold is $77 million due in part to 1,000.00

0% currently 61.0% Sales sharing data with 500.00

Sources: Statista, Company Website Sources: Statista, Company Website

cash to pay for these cash to pay for these

A key aspect of our App Development Marketing Campaign A key aspect of our

Implementation Asia Pacific Region

FITBIT ‐ MARKET SHARE

Asia Pacific Region Corporate Clients Geographic Outreach

Must pivot away from emphasis on short-term sales and fast

Respond to current and future dynamic market conditions and

Sources: Company Website, Company Analysis Sources: Statista, Company Website

Corporate Clients Geographic Outreach Global Partnerships

Leverage Receive Nurture Harness Members receive discounts

Easy and direct access to our growing consumer base

Global Partnerships Singapore

Build Cultivate Align Solidify

to lay the foundations for future growth Aging population, by 2050 the number of

Most significant growth in DOMESTIC COMPETITORS

Asia Pacific Region Risk and Mitigation

Your Workout. Your Data. Your Choice.

Industry Privacy Security Financial Global

Presentation Slides Financial Constraints Active Users

Sales in billion U.S. dollars

Takeaways Australia Projected Revenue

Earn Bits Global Wearable Sales/Product Corporate Clients cont. 0

Fitbit Research Overall Global Sales

Revenue in billion U.S. dollars

Appendix: Wearable Unit Shipments Appendix: Active Users

102.4 20,000,000.00 Using current active

Appendix: Upgrade Costs Appendix: Income Statement

Appendix: People that Track Fitness Data Current

Smartphone users as share of population

40.0% 37.4% 40.86%

Source: Statista DMO; ID 321482

Android BlackBerry iOS Windows Other 120

Revenue in billion U.S. dollars

Source: Kantar Worldpanel; ID 260418 Source: Tractica; ID 610447

Source: Tractica; ID 610433

Appendix: Fitbit and Medtronic Partnerships Appendix:

McKesson NetApp Optum Pega Printpack

New Zealand China Australia Australia China