Fitbit rolls out its newest wearable for kids—here’s what this might mean for its business

Fitbit launched a new wearable for children called Fitbit Ace 3 that tracks user activity and sleep, and comes with an eight-day battery life. It also features a connected app that gamifies physical activity for kids, motivating them to get 60 minutes of activity a day—coming at a time when millions of kids are learning remotely and missing out on the physical activity they would typically get in a school environment.

Fitbit Ace 3 could be a revenue booster—particularly if Fitbit incorporated it into its health services arm, Fitbit Health Solutions.

• In 2019, when Fitbit saw a 9% year-over-year decrease in revenue, its new devices, including the Fitbit Ace 2, brought in 72% of its revenue.
• And the market for children’s smartwatches is expected to be valued at around $1.3 billion—up from $535.5 million in 2019, per Valuates Reports.
• Taking this into consideration, the Fitbit Ace 3 could be a lucrative addition to the benefits packages Fitbit Health Solutions sells to its 100-plus payer customers. Payers open up an entire funnel of consumers who could boost its brand recognition in the blooming children's wearables space and simultaneously help drive D2C sales.

Even though the current generation of children are the most tech-savvy ever, wearables like Fitbit Ace 3 could pose serious risks around data privacy and safety that drive their parents away from buying. Children today have grown up immersed in technology: In the US, 18% of kids 11 and under and 83.2% of teens own a smartphone, per Insider Intelligence. And those adoption levels are only going up as younger cohorts become increasingly accustomed to digital tech in their lives. This could mean wearables and digital health products would naturally fit into kids’ routines. But since wearables companies give the option to collect user data, and a child cannot directly consent to sharing their personal data, it raises ethical concerns. Further, with a greater digital footprint comes greater data privacy risk—and the risk for children is even higher since wearable vendors can hand off sensitive data to third parties who use it to develop targeted ad campaigns that can influence children's behavior. This sparks more questions of concern in the case of Fitbit—which is owned by a company with the most powerful ad network in the world: Google.