Five years ago, most people had never heard of a wearable smart device, and the iWatch was little more than a glimmer in Apple's eye.

Today, wearable technology is a vibrant consumer industry--gracing everything from fashion runways to your local gym. And it's big business too, as Fitbit's announcement that it plans to raise nearly $500 million from its initial public offering later this year testifies.

Fitbit faces heavy competition from large consumer brands like Nike and Microsoft, as well as less costly foreign-made products, such as Huawei's TalkBand. The company does have something of a first-mover advantage and strong brand recognition--which proves that you don't have to be the biggest to be successful. And in Fitbit's case, its access to public financing should only deepen the San Francisco-based company's head start.

Comparative advantages.

In recent years, Fitbit has sewn up large corporate partnerships with health insurance companies and wellness programs at major corporations to make its product the go-to device for such offerings.

Its data tracking services are also becoming something of a standard in the marketplace for anyone interested in offering such services to their employees. Fitbit currently counts 10 million active users on its data platform, and it sold 11 million devices in 2104.

"There's the opportunity for Fitbit to go after larger and larger purchasers, and the opportunity to become the [health data] platform...that everyone wants to do best," says Ross Fubini, a partner at Canaan Partners, in Menlo Park, California.

Fitbit, co-founded by James Park, the company's chief executive, and chief technology officer Eric Friedman in 2007, sells products that the more recently launched Apple Watch mimics, but for a fraction of the latter's $700 price tag.

Loosely speaking, its six health tracking wristband products belong to the category of devices known as the internet of things, which wires everyday products such as thermostats or cars to the internet and, through apps, to smartphones. After competitor Jawbone, with which it is currently involved in a patent dispute, Fitbit has raked in more money in the wearables category than its competitors.

Prior to its IPO announcement, Fitbit took in $66 million in venture capital to Jawbone's $518 million, but its IPO should close that gap pretty quickly. On Tuesday, Fitbit said it expects to raise up to $656 million from the offering, after it increased the price range for its shares for between $17 to $19, from $14 to $16 each.

Another point of departure between the two companies: After years of losses, Fitbit managed to become extraordinarily profitable in 2014--notching $131 million in profit for $745 million in revenue, which was triple its sales in 2013. By contrast Jawbone, which was founded in 1999, has struggled with profitability and product delivery issues for years. (A spokesman for Jawbone said the company had no comment. Fitbit was not immediately available to comment.) 

Hardware's sheen goes untarnished.

It's something of a paradox that a company, which actually produces a hard good, is profitable, compared with so many other recently public companies that produce software-based social networks, applications, or cloud-storage services.

One reason for that has to do with having an identifiable name brand synonymous with the industry, not to mention high margins, of about 50 percent, which Fitbit noted in its IPO filings with the Securities and Exchange Commission. (GoPro is another example of a profitable company that produces hardware in a nascent industry now filled with competitors, but which it helped define). And going forward, that's likely to give Fitbit a strong platform to launch new services.

It could become the de facto platform for health-tracking information, much the same way that Google is synonymous with searches, experts say.

And it could yet be an acquisition target for some of the large health insurance companies with which it currently partners, such as Humana, or even consumer brands, like Nike, that may want access to its data or its vast customer base.  

Those options come with having a first mover advantage, and money in the bank.

"We started Fitbit with the vision that sensors, data, and amazing software could transform the way people think about health and fitness," Park and Friedman wrote in a letter in the company's SEC filing. "Success was never obvious, easy, or guaranteed."