Fitbit financial results are disappointing the company will focus on Smartwatches
Fitbit did not meet the expectations of specialists with their financial results for the last quarter of 2017, as well as predicted low sales at the beginning of the new year. In an attempt to change the downward trend of interest in fitness trackers, the company will expand its portfolio of smart watches in 2018.
Disappointment in the holidays. Fitbit reported $571 million in revenue in the last quarter of last year, or $3 million less than the same period a year earlier. Sold items fell 17% annually in the generally strong period around the Christmas and New Year holidays.
Fitbit sold 5.4 million units in the last quarter of 2017 against 6.5 million units in October-December of the previous year. The fact that the average device price increases by 20% to $102 helps to ease the revenue drop.
The low sells are not limited to performance over the past three months, but the annual result also implies a negative trend. Fitbit’s revenue in 2017 shrank from $2.169 billion to $1.615 million on an annual basis. The net loss increased from $102.8 million in 2016 to $277.2 million, and the devices sold for the year decreased from 22.3 million to 15.3 million units.
Expectations for the first three months of the new 2018 also do not seem optimistic. Fitbit forecasts a drop of between %15 and 20% in revenue on an annual basis.
Change of the strategy. To a large extent, Fitibit’s situation is dictated by the difficulties the company is experiencing in the fitness tracker market. On the one hand, a lot of consumers increasingly prefer the slightly more expensive but more functional smartwatches. On the other hand, Fitbit faces fierce competition from Huami and the Xiaomi MiBand in a shrinking market. According to research firm CSS, the segment of fitness trackers has shrunk by 18% in 2017.
For all these reasons that Fitbit will bet more aggressively to smartwatches in 2018 and will release several models. Until now, the company had only one device – Ionic. Unfortunately, it failed to grab the attention of consumers due to the strong competition in this segment as well.
This seems to be the desire of customers to have smartwatches. Fitbit’s best-selling product for the past year is Charge 2, which can be controlled from the strap, but as design and shape it is more closer to smartwatches than to fitness trackers.
“We made important progress in 2017 under rapidly changing market conditions. We delivered on our full year guidance and drove down operating expenses while continuing to invest in innovation. We delivered important foundational assets with the launch of the Fitbit operating system and SDK, allowing us to scale future smartwatches quickly and deliver dynamic experiences for users.
We also made progress in integrating into the healthcare system, with strategic collaborations with United Healthcare and Dexcom, and acceptance into the FDA’s digital health pre-certification program,” said James Park, co-founder and CEO. “In 2018 we’ll focus on managing down expenses, continuing to expand in the smartwatch category and supporting our engaged global community on their health and fitness journeys.”
A move that, according to experts, is inevitable, but also hides its risks. Especially in Apple’s dominance in this category. Apple’s smartwatch doubled sales during Christmas holidays and took over 51% market share for the period. Post from: GizBrainhttp://szlifestyle.com/sz/2018/02/28/fitbit-bad-financial-results-company-will-focus-smartwatches/https://i0.wp.com/szlifestyle.com/sz/wp-content/uploads/2018/02/fitbit-smartwatch.jpg?fit=1280%2C720https://i0.wp.com/szlifestyle.com/sz/wp-content/uploads/2018/02/fitbit-smartwatch.jpg?resize=180%2C150TECH NEWSFitbit,smartwatchFitbit did not meet the expectations of specialists with their financial results for the last quarter of 2017, as well as predicted low sales at the beginning of the new year. In an attempt to change the downward trend of interest in fitness trackers, the company will expand its portfolio...Martin JonesMartin Jonesmartinj@szlifestyle.comContributorMartin Jones is a writer at szlifestyle.comszlifestyle.com Tech News, Life Style, Reviews, Videos!