Will New Fitbit Trackers Rejuvenate the Company?

Consumer Electronics

Published: March 13, 2018 11:25 am

Last Updated: January 12, 2020 2:28 am

Wearables maker Fitbit Inc. (NYSE: FIT) introduced two new products Tuesday. The Fitbit Ace is a device for children over the age of 8 and the Fitbit Versa, a new smartwatch that the company hopes will be a better competitor than the Fitbit Ionic to Apple Watch.

Along with the new Versa device comes new female health tracking technology to help women track their menstrual cycle, view all their health data in a single place and “better understand connections to their overall health.” The children’s Ace is an activity tracker the company says “makes fitness fun for kids while inspiring the entire family to build healthy habits together and help fight decreasing levels of activity in children.”

The Fitbit Versa marks a shift in direction for the company, according to co-founder and CEO James Park. Fitbit wants to be the point of interaction between consumers and the health care system. In an interview with TechCrunch, Park said:

One of the challenges that healthcare has today is in the effective use of technology. A bigger problem they have is in engaging consumers — keeping them active and motivated to use these tools that are coming out. No one is really excited to interact with their hospital or healthcare provide[r]. Our aim is to become a front end to the consumer healthcare system.

The company has to do something. In fact, it has had to do something for about two years. The stock price reached a high of nearly $48 just a few weeks after the June 2015 initial public offering. By late February of 2016 shares had fallen to just over $12, and the slide to a recent low under $5 has been more or less steady since then.

Earlier this month researchers at IDC reported that Apple Inc. (NASDAQ: AAPL) overtook Fitbit as the market share leader in wearables for 2017. Apple lifted its share of the wearables market from 10.8% in 2016 to 15.3%, while former top dog Fitbit saw its share dip from 21.5% to 13.3%. In the fourth quarter of last year, Apple shipped 8.0 million wearable devices, compared to 5.4 million shipments from Fitbit.

Fitbit is not giving up on the consumer, but with the new Versa smartwatch to go along with the Ionic, CEO Park sees the company as well positioned to address the consumer shift from fitness trackers to smartwatches. Park said Fitbit is looking to “streamline” its fitness tracker product line but expects the trackers to continue to play an “important” role in the company’s future.

Park, who made our list of the worst CEOs of 2017, said the Versa “fills a critical need in the market by delivering a beautifully designed, full-featured smartwatch that is easy to use at a very competitive price.” That price is $199.95 and presales begin today. The Versa will be available globally next month.

The Ace tracker for kids is priced at $99.95, with presales also beginning today. The device will be available worldwide in the second quarter of this year.

Fitbit shares traded up about 1.5% Tuesday morning, at $5.39 in a 52-week range of $4.67 to $7.32.