Fitbit gets another holiday bump and much-needed breathing room
The holidays have come and gone and — as usual — Fitbit got a bit of a lifeline.
Once again, everyone is buying Fitbits for gifts. We won’t know exactly how many, but if you just take a quick look at the download charts, Fitbit hit the top off the App Store (even in the presence of the gargantuan promotions of Super Mario Run). In fact, it looks like it’s a pretty popular gift for parents too — there are bumps in the App Store chart around Mother’s Day and Father’s Day.
And it couldn’t come too soon. Wall Street is giving Fitbit a little bit of a breather with the stock up around 7% after it’s tumbled almost 75% this year. The year has not been kind as it’s had plenty of poor performance and also decided for some reason it would enter the smartwatch market. The whole wearable market itself isn’t doing that well, with eMarketer drastically slashing its growth forecast from 60% to 25% for the year compared to 2015.
Fitbit continues to iterate, come out with new products, and it’s at least looking for answers in the increasingly challenging market. The company snapped up the assets from Pebble and some of the team, which rolled out one of the first true smartwatches thanks to a massively successful Kickstarter campaign. It wasn’t a great outcome for Pebble, but at least it means that Fitbit is in exploration mode beyond its normal trackers.
For Fitbit, the difficulty curve is only going to get steeper as Apple doubles down on the fitness aspects of its watches. It has a Nike+ version of the watch and is clearly trying to lock down the fitness tracking market alongside the smartwatch market. Apple has always been known for premium products, and while we haven’t seen any numbers it’s possible that people may simply be willing to pay more for a fitness tracker that goes beyond just checking steps.
Still! Fitbits seem to be good gifts, and people seem to keep buying them. We’ll see where everything lands when the company reports its earnings in the first quarter, and it’s going to need to show some kind of major breakout in order to not only show it can survive in the presence of more robust products like the Apple Watch but also slowing adoption for wearables in general. Fortunately for Fitbit, it also ended one legal battle with Jawbone, so that’s one less thing to worry about going forward.
Merry Christmas, Fitbit. You still have a lot of work to do for Wall Street, but for now you get a breather.