Fitbit struggles over holiday period
Fitbit's stocks have been plummeting recently, falling 5.8% last week and 75% during 2016. The main downfall of the once-wearables innovator is said to be the increased market competition, but slow sales growth and narrow margins are also to blame.
Analytics firm S3, released a report on the company, stating, “Short sellers have added more than 20 million shares over the first two weeks of 2017, bringing the total amount of shares on loan to close to 50% of float.”
Part of Fitbit’s struggle has been caused by competitor's increased presence in the wearables market. Apple’s online revenue generated over the holiday season grew from 37% in 2015 to 46.6% in 2015, while Fitbit’s dropped from 36.8% in 2015 to 31.9% in 2016. Less-expensive fitness tracker brands, like MisFit and SmartBuddies, and apps have also been guiding consumers away from Fitbit.
In 2017, Fitbit's revenue is targeted to grow just 26%, a whopping decrease from the 149% growth in fiscal 2016.
But Fitbit still holds a bright future in the world of wearables. Fitbit just acquired smartwatch manufacturer Vector Watch.Unlike most wearables, that have a maximum 3-day battery life (and just 1-day for Apple Watch),) Vector Watch’s smartwatch boasts a 30-day battery life.
Fitbit also owns smartwatch maker Pebble, purchased in December. This acquisition can help Fitbit step farther into the smartwatch market – the only foray into the smartwatch field has been the “Blaze” Fitbit, launched mid-2016, that offers everything the original FitBit band does, but with the addition of a GPS, on-screen workouts, and pulse monitor.
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