Will Fitbit’s new products drive sales and help maintain the company’s market dominance?
Report Available: October 19, 2016
Blueshift’s initial research shows FIT, the leader in the fitness wearables market, hoping for a significant sales boost with the release of two new products. The Flex 2 and Charge 2 fitness trackers have generated a lot of excitement and positive reviews, leading to the belief it could spur strong holiday sales. However, past new product releases have disappointed, leading to product recalls and lawsuits, and competing companies continue to upgrade their fitness trackers and smartwatches.
- FIT sold 5.7 million fitness trackers in Q2. The company beat Street expectation for EPS and revenue and was in line with its Q3 outlook. New products, the Fitbit Blaze and Alta accounted for 54% of revenue in Q2 with two-thirds of the buyers being new customers. FIT’s top line grew 48% compared to a year ago, but sales growth has slowed and lower profit margins are concerning. In an effort to boost its fortunes, the company announced it would be launching additional new products for the upcoming holiday season.
- FIT’s new Charge 2 has generated high interest in fitness and tech communities. Reviews and customer comments highlight both the strengths and shortcomings of the new products. Ars TECHNICA said the Charge 2 replaced the Charge HR as the best-value FIT device and is ideal for new users. However, it noted that the Charge 2 is a totally optional upgrade for current users because of the limited number of new features compared to the Charge HR. Early customer comments regarding the Charge 2 have been both positive and negative, with one posting a laundry list of problems and another saying his was working just fine. The Flex 2 will count a swimmer’s laps, a feature not present in any of FIT’s devices until now.
- Competition in the wearable market is coming from many directions. AAPL and FIT appear to be on a collision course this holiday season with AAPL’s Apple Watch 2 adding additional fitness tracking features and FIT’s Flex2 and Charge 2 taking on some smartwatch functionality. FOSL continues to add to its smartwatch and fitness tracking lineup with the Q Wander and Q Marshal, and the company says it will add 100 new smart devices to its product offerings before the end of 2016. GRMN continues to produce high quality fitness tracking devices, introducing the Vivosmart HR+ in May. Techradar’s top 10 fitness trackers for 2016 include offerings from seven different companies and ranks the FIT Charge HR No. 1 and the Charge No. 7.
- A new study shows the limited impact of a fitness tracker in helping its users lose weight. Over the two years of the study, those using a fitness tracker lost five pounds less than those tracking their progress on a website.
- Blueshift’s Sept. 11, 2015, report revealed that FIT would dominate the wearable market into 2016 and was expected to be the go-to-gift for the 2015 holiday shopping season. FIT sold 8.1 million units in Q4 2015 and dominates the wearable device market with 24% market share.
How are FIT’s new products being received? How important is the water resistant feature of the Flex 2? What is happening with shelf space and inventory for the new products? What effect is competition having on FIT? What is the future of the fitness tracker market? To answer these and other questions, Blueshift will issue a market research report by gathering data from Retail buyers, Store personnel, Supply chain and distribution, and Industry specialists.
Companies: Alphabet Inc. (GOOG), Apple Inc. (AAPL), Fitbit Inc. (FIT), Garmin Ltd. (GRMN), Microsoft Corporation. (MSFT), Samsung Electronics Co Ltd. (KRX:005930), TomTom NV (AMS:TOM2)
Research Begins: Oct. 3, 2016