Fitbit sees sales growth on new products - Mobile World Live

Fitbit sees sales growth on new products

03 AUG 2016

Wearables market leader Fitbit posted a number of positives for the second quarter of 2016, as its new products picked up pace, although increased costs took their toll on the bottom line.

It shipped 5.7 million devices in the quarter, up from 4.5 million.

Its new products – Blaze and Alta and related accessories – comprised 54 per cent of revenue, up from 50 per cent in Q1.

For the new devices, around two-thirds went to new customers, with the remainder going to upgraders. Of the upgraders, around 20 per cent had been inactive for 90 days or more.

Fitbit also indicated it has new products in the works for the holiday sales period.

The company reported a profit for the period of $6.3 million, down from $17.7 million, on revenue of $586.5 million, up from $400.4 million.

Gross margin was affected by an increase in warranty reserves for legacy products, with the expectation that this will cover future liabilities, allowing a return to “normalised” growth margins moving forward.

It also noted an increase in operating expenses, reflecting increased investments in R&D (up to $79.9 million from $30.5 million) and marketing (up to $118.1 million from $69.7 million).

The US contributed 76 per cent of revenue, followed by EMEA (17 per cent), APAC (2 per cent) and other Americas (5 per cent). But growth of 42 per cent in the US was oustripped by EMEA (150 per cent).

APAC suffered, however, due to the closure of an Australian retail partner and a reduction of channel inventory.

The company launched Chinese, Japanese and Korean-language versions of products into their respective markets.


Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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