I see a similar pattern with FitBit. It's a 3-axis accelerometer with some firmware and software. Someone smarter than me could probably get something working in a weekend (though weekend prototype to production is admittedly a long road). Worse, plenty of things have accelerometers in them. My iPhone. Your Samsung phone. My Pebble watch, which uses the Misfit app to count steps and track sleep without requiring that I actually buy a Misfit device. Some garage outfit may not put Fitbit out of business, but larger device manufacturers might be just one software update away from doing so.
Fitbit will have to have some serious value-add to stave off competitors, I think. Maybe I'm wrong, probably am. But I won't be buying their stock.
[0] http://pogue.blogs.nytimes.com/2011/04/14/the-tragic-death-o...