Fitbit has been a key contributor in the growth of the fitness device market over the past year. Many people rely on the devices to track their fitness statistics such as steps and to have some friendly competition with their peers. Unfortunately, Fitbit’s stock has fallen by around 30%. If stockholders only saw the percentage, they would most likely be scared. Is Fitbit on the downfall?
The stock price is very misleading when it comes to Fitbit. The company believes that an early release of two of their products, the Fitbit Charge 2 and the Fitbit Flex 2, caused stockholders to see the drastic decline. Due to high customer loyalty and anticipation of the new products, a good portion of the Q4 expected revenue was collected in Q3.
Fitbit has claimed problems with the supply chain, poor foreign marketing performance, and early release of the new products as their excuse for their stock. With Apple releasing the Apple Watch 2 recently, that could be seen as an external force affecting Fitbit’s market performance. Fitbit relies on simplicity with their user interface to attract customers interested in tracking their fitness results. With Apple Watches being a prime example of technological convergence by turning a watch into a mini iPhone, Fitbit might have trouble keeping up. Good news for Fitbit is they currently hold 25% of the wearables market and studies show that the market will continue to see significant growth in the future. Will Fitbit run away as an industry leader or slowly falter to similar products being introduced? Only time will tell.
https://www.yahoo.com/tech/why-fitbits-stock-is-crashing-232120710.html
Slowly but surely I think Fitbit knew that many companies woud make products similar to theirs. I think the the thing with Fitbits is that its not that versatile and other products can do way more than what Fitbit can do now. I think if Fitbit wants to stay a float and have some growth in there company they have to make new products that can do stuff like the apple watch or other fitness like apps or gadgets. I think maybe they can make the device more connected to other devices in your household and make it more like an internet of things type of product. In the future more and more advances will be made in the fitness world and the companies with the best edge will come up and on top and that’s what Fitbit needs to do.
I think that where Fitbit stands now leaves them a great opportunity to grow their already strong market share in the wearables market. However, a few missteps could be catastrophic for Fitbit. Fitbit is a well distinguished company and has a great advantage that their main focus is wearables and that this isn’t a secondary product unlike the Apple Watch. I think with all these bright spots for Fitbit, the worst they can continue to do is let competition force them to make poorly calculated designs such as forcing products out before they are scheduled and ready. The one disadvantage Fitbit has behind Apple is that Apple already has such a big R&D budget and such great soft wear. I think the best bet for Fitbit would be to make an acquisition or merger to further develop the company. By gaining a big advantage in their software or a revealing a revolutionary device can give them a big jump on the competition.
Fitbit devices and Apple watches have had an inverse relationship throughout the past year. In the first three sales quarters, Fitbit has positively been trending while Apple watches have negatively been trending. But in a turn of events, Apple’s sales over took Fitbit. How did we come to this? In the third quarter, Fitbit ramped up production faster than expected in order to send out to stores. But, the Charge 2 has not been selling as fast as Fitbit has been producing. In other words, Fitbit’s supply is higher than their demand. This could be due partially because of Apple’s new product launch in the third quarter. Apple released a new watch that is more fitness centered than the generations before it. While Apple watch is more expensive than the highest selling Fitbit, Apple’s name has more recognition that Fitbit which could contribute to their sales. Both competitors should be concerned for their wearable sales in the future because of competitors who produce the same type of product cheaper.
Sources:
http://www.nasdaq.com/article/nobody-wants-a-fitbit-for-christmas-cm711595
http://bgr.com/2016/11/18/if-you-dont-want-to-drop-big-bucks-on-a-fitbit-or-apple-watch-the-striiv-smartwatch-might-be-your-best-option/
http://www.fool.com/investing/2016/06/23/why-fitbit-stock-is-down-57-in-2016.aspx
I thought this was an interesting article comparing Fitbit’s trends with the trends of GoPro. It also talks about their attempt to compete with products like the Apple watch, which I think is a mistake. The apple watch features that Fitbit cannot match. There are also so many companies now making similar products such as Nike that the market has so many different options people will begin and are beginning to look elsewhere.
Fitbit, despite its initial but brief growth spurt, has shown significant decline in consumer value due to the emergence of popularity regarding Apple’s iWatch. It is inferred that consumers purchase a Fitbit because of their inclination to achieve a higher level of fitness; however, in actuality the watch actualizes the idea of fitness rather than promoting it. Apple’s iWatch, on the other hand, is practical for convenience and style, and delivers on that exceptionally. In Scott Galloway’s talk on the “four dark horses”, he illuminates the success the iWatch has achieved in comparison to other watch companies such as Fitbit, Swatch, and Tag Heuer, to name a few. In order for Fitbit to catch up on some lost ground, analysts recommend they improve the technological capabilities of the Fitbit so it can compete with the main competitor, Apple’s iWatch. Things like accessing the internet, ability to communicate with other Fitbit users, and other features are among many mentioned by tech-analysts that scrutinize the watch industry. In conclusion, Fitbit has taken a hit over the last 2 quarters; yet, success is imminent if they decide to innovate into other aspects of the Internet of Things.
Source: http://www.wareable.com/smartwatches/apple-watch-v-fitbit-surge-2015-super-watch-showdown
http://mashable.com/2014/12/06/fitbit-charge-review/#1zX_Mz.hikqU
Fitbit has been a very popular device in recent memory in sales and even just out of personal experience I saw many of my family members either purchase or receive one of their devices as gifts. Since going public, however they have been seeing a consistently downward trend in their stock prices. As you stated, there is a lot of competition for fitbit in the market right now. Even my iPhone has access to plenty of fitness apps that can do essentially everything that a fitbit can do, despite being a little more impractical size wise to use for high intensity workouts. In my opinion I think that fitbit needs to expand their product line and give their products more features that its competition does not have. We saw some of this with their newer products but they must continue to innovate or else they will be outdone by their competition. One step fitbit is doing to help improve their brand currently is cross promoting with the video game NBA 2K17, in which players who accomplish their daily 10,000 steps or other fitness goals with their fit bits receive bonuses and boosts to their players in the game. These kind of marketing initiatives along with continued innovation should help fitbit stand out as we see more and more imitators and changes in technology.
http://www.si.com/tech-media/2016/11/18/fitbit-nba2k17-partner-healthy-living