Someone famous once said, “..reports of my death are greatly exaggerated” and the same may apply to Fitbit despite an EBITDA loss of US$144k in Q4.2016.
I was going to make a witty attributional comment about Oscar Wilde but Mr Google correctly pointed me in the direction of Mark Twain’s famous words. Inconvenient facts! Sigh.
I
t can’t be great to lose money at Christmas. Haven’t we been told that Black Friday traditionally marked the time after which retailers made their profits? That obviously didn’t apply to smartwatch manufacturer Fitbit.
Furthermore they seem to have ‘mislaid’ an eye-watering quarter of a billion dollars worth of profits comparing FY2016 to FY2017 ie a drop of $360m EBITDA from 2016 to 2017. No doubt some bonuses will still have been paid as that’s normally how these things work.
Someone will have achieved a target somewhere if you look hard enough.
Plus; often the figures are accounted for in a way to take a quick hit on the bad news to make the performance of subsequent events rosier. That often happens before and after a new CEO, for example. Although Fitbit haven’t had any changes at the top that I’m aware of despite recently announcing that 5-10% of staff would be leaving. That typically means that people will be leaving who don’t run the company and who just work there; after all it was probably their fault rather than the fault of the leaders. (I’m just being cynical).
It’s not all doom and gloom for them though as ACTIVE users on a like-for-like basis (I assume L4L) went up from 16.9m to 23.2m.
But it will be doom if they don’t get their commercial act together pretty sharpish. They’ve gone out and ‘bought stuff‘ (Pebble/Vector) in order to boost their products and create an app store.
23m users is a great place to grow from. Let’s hope they do. But just look at the image above. Polar, with presumably much smaller resources turn out the rather awesome M600 (well, I think it is) and Fitbit have the dated-looking Surge/Blaze/Charges. Also a great place to grow from is Fitbit’s software which tends to be great both on the smartphone and online…well on ANY platform I try it on.
Here’s something along a similar vein if you want to read in a bit more depth explaining why 2017 will be Garmintastic rather than Fitbittastic. That post also talks a bit about 2020 suggesting that Fitbit could be one of the survivors as others go to the rails. But if Fitbit keep losing money at that rate then they will soon be gone.
Source: Fitbit
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Fitbit has a bajillon (actual number, I swear) watches…and every other company out there does what they do…and more. The only thing currently holding fitbit together is its install base. That base…were/are those that want a passive device that records metrics without much hands-on input.
From my own personal experience, I only see fitbits on people that work white collar jobs, are retired, have semi-sedentary lifestyles or want one for brand recognition. There is nothing wrong with those ways of life, but from a company perspective…what else can you develop for that install base….and a massive one it is!
As of right now, the Surge (and perhaps the Blaze and charge HR2) are the only fitbit offerings close to be sport watches…the gaggle of other watches already fill the niche for the rest of the people who own a fitbit. What else can they do? Better accuracy? Longer battery life? Instead, they have centered around aesthetics (watchbands, lots of different watch bands). Shiny they may be, they are just distractions to the bigger problem;
It’s the same thing under hood, over and over.
It’s a problem companies like Apple have and are starting to have an adverse effect on them, especially when there are direct competition that does more out the gate and then innovates beyond. If Fitbit wants to survive, they need to do more than what they do now; they need to be the leader in the niche no one has been able to conquer…the smartwatch market.
I said this before, there is no king here, no matter what apple thinks or samsung. Either fill the top of the heap because there is nothing else here. With all the purchases Fitbit made, they need, desperately to make that well-rounded device capable of running circles around either company in style, performance, and options. They need to capitalize on that massive install base and then cater to those nebulous users beyond this base. They need to say to this side of the market that they are the premier device to use if you want a smartwatch, and they need to gear their entire line to this. Sure you can put out something that might veer into the far-end of the market (the surge 2) and sure you can innovate here, but the masses want a well rounded device that fits their lifestyle all the time, not some of the time.
Just my two very opinionated cents here.
opinions are worth WAY more than 2 cents here. especially thought-through ones 😉
yes I mostly agree. fitbit hardware is mostly ok. I look at some of the other companies and they just produced tat for years. they are starting to get found out. at least fitbit stuff looks mostly ok (must be improved) and works (must be expanded and improved).
one areas I think is that people DO want aesthetic stuff to wear (almost be definition). so companies have been developing new plastic bands to address that. BUT I think people like a nice screen with nice colours, which can maybe even host a picture of their dog and making it non-pixalatably recognisable. fitbit lacks there…evena better screen and freshened ui would work wonders methinks.
Thanks for the reply. Once I get going, I tend to wall-o-text responses.
I owned a Fitbit Surge, and I agree I really liked the look (and feel) of that watch. The band was the most comfortable watch I have ever worn. They made alternate colors (I had the black one though). And I agree with the aesthetic stuff people want…the problem is you’re getting the same tech over and over with little change. After a while, people catch on.
They need a software revolution (internally) and a platform for people to get excited about. Just do what they do now, but also bring the proverbial fight to Apple and Samsung’s watch OS. I’d include Android 2.0, but the lineup for those watches are thin as of this writing, or can’t even last half a day (see the new LG watch). Fitbit has name recognition, a huge standing install base that is deeply entrenched (for now) and is know as a solid fitness watch that meets the mainstream user’s needs…they need to do something big and soon.
Or, they can make the Alta HR…which was announced earlier.
make simple stuff. cheap.
sell lots. make LOTS of money.
as you say. people catch on.
then you don’t sell so much.
or ‘do a garmin’ make REAL complex stuff that will ‘hopefully’ work…sell it for a premium…sell lots as no one else can match the functionality…make lots of money
it’s all about R&D I don’t think companies are investing enough. google, apple, garmin ARE. fitbit obviously are NOT…otherwise why did they have to purchase two companies
then again my polar s720 from the Neolithic period did hr and laps and cadence. you don’t NEED much more than that to do well.