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Adidas buys Runtastic: What does it mean and who is next?

by User Not Found | Aug 12, 2015

There is a trend in the apps space that has been simmering below the surface for some time but now is prepared to boil over after Adidas acquired Runtastic. Apps have moved from just entertaining asides to a core augmentation of lifestyle. In fact, since we began tracking the most popular apps via AppTRAX in 2011 we have seen few categories experience the growth that Health & Fitness has over the last year. Devices are offering new capabilities, awareness of health benefits are increasing and the biggest players in the space have not (until recently) invested heavily in apps allowing for new players to thrive.

Companies are realizing that apps can have a sizable business impact. First, they drive direct revenue from paid downloads, subscription service and in-app purchases of additional content. However, they also serve as a brand extension and this is an area that big health and fitness companies almost completely missed the boat on in mobile (Nike does have an app that does quite well). In fact, until the last few months few of the big companies really had a big brand presence in apps. In their void a raft of new competitors emerged to define fitness to the app generation (and beyond). So, it is natural that now come the acquisitions. In fact, with two major acquisitions completed this year I predict we will see more than $1B in acquisitions before EOY in the Health & Fitness app space.

It started with UnderArmour - as outlined in an excellent report by my colleague Adam Thorwart titled Under Armour: The Path To Success In Digital Health & Fitness. Under Armour first attempted to go it alone in mobile but quickly failed and began an acquisition strategy that started with MapMyFitness in late 2013. Now two years and three major acquisitions later (the most recent of which was MyFitnessPal for $475M in March of this year Under Armour's brands aredominating the most popular app lists. Not only is the company generating revenue from its investments but it is using iconography on each app to extend its core branding.

According to our Health & Fitness App Tracker July - iPhone the Runtastic GPS Running, Walking, Jogging, Fitness Distance Tracker and Marathon Training app (and it's paid PRO version) ranked amongst the 10 most popular Health & Fitness iPhone apps globally on each list. In fact, the Pro version had a 46% of total possible appearances in July ranking it fourth globally.

With multiple fitness apps now selling for more than $200M in the last six months the question comes up of who is next? Please note I have no affiliation with any of the companies listed - we are using data to generate this list.

1. has the most popular paid fitness app appearing in the most popular paid iPhone apps overall 67% of the time in July globally. The app sits atop the Paid and Grossing list for iPhone. While the portfolio of seems at first glance smaller than other companies its role atop the market should make it a target.

2. appears on both the top paid and top grossing list for iPhone in July (and June for that matter). While the app is just a component of a broader content play it's position could make it an attractive market - especially to companies that compete in the Yoga space.

3. RunKeeper touts having more than 45M runners and a firm position amongst the most popular Health & Fitness apps. As the number of independent fitness app developers shrink RunKeeper and its community will look ever more attractive.

Will the companies developing these apps be acquired? That is unknown but often times when acqusitions heat up those in the space overreact and begin reaching out to the remaining independent companies in a partiuclar area. The most popular Health & Fitness apps is a small circle. In fact, according to our July Tracker of the top 10 Free, Paid and Grossing Health apps on iPhone there were 23 unique apps (some overlap between Free/Paid and Grossing accounting for this). Of these just 5 are likely acquisition targets.

In closing it is clear that companies are realizing that applications are important to their core brands and future growth. Health and Fitness is the category du jour this year but it won't be the last and identifying growth areas, potential partners and upside opportunity are imperative to gaining an advantage for companies looking to succeed. Apps are an important part of our future and while many fail - those that succeed can make a sizable impact on the market.

Click here for a free copy of the most popular Health & Fitness Apps on iPhone in July.

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