Fitbit ups health play to counter tracker troubles - Mobile World Live

Fitbit ups health play to counter tracker troubles

08 MAY 2018

Fitbit announced new apps and clock faces designed to boost its health play, as it continues to battle weakness in the core fitness tracker market.

The company said its new tools are intended to “help people better manage their health, directly from the wrist”, including offering the ability to “improve wellness and help manage conditions, like diabetes and some types of cancer”.

It also said the apps will give various parties new opportunities to better support users outside of a clinical environment. Partners include diabetes management company Dexcom, oncology management specialist Diplomat Pharmacy, wellness company Humana (Go365) and drug store Walgreens.

“Smartwatches provide a powerful platform to deliver important health tools that help our users manage conditions more conveniently than ever before. With these apps and clock faces, we continue to deliver on our promise to bring important health information to the wrist,” said James Park, co-founder and CEO of Fitbit.

The moves come shortly after Fitbit partnered with Google to bolster its health capabilities.

Tracker tribulations
Fitbit’s push into health, accompanied by the launch of smartwatch devices, comes as it sees weakness in its core fitness tracker market. While its smartwatch proposition is picking up pace, trackers are still the biggest chunk of its business, which is impacting its numbers.

The company sold 2.2 million devices in the first quarter (to 31 March), down 27 per cent, leading to a 17 per cent decrease in revenue (average selling price was boosted by increased sales of more expensive smartwatches). It said that while smartwatch sales did not completely offset the revenue decline, “it strengthened the brand and relevancy while highlighting the opportunity to regain market share”.

Smartwatch revenue is expected to exceed tracker revenue in the second half of 2018, driven by both new users and upgrading Fitbit customers. In Q1, smartwatch revenue represented 30 per cent of the total, having nearly doubled quarter-on-quarter.

With regard to trackers, Fitbit said it continues to see demand in the market “across price-conscious users in the health care system”, so it will continue adapting to serve the segment. It expects to use a common tracker operating system “while leveraging our supply chain to more efficiently design, develop and manufacture devices”: it said that using technology from its Ionic smart watch enabled it to launch its Versa watch with “approximately 45 per cent less development hours”.

For Q1, Fitbit saw its net loss increase to $80.9 million from $60.1 million in the prior year, on revenue which declined to $247.9 million from $298.9 million.

And while Fitbit is pushing hard into health, it acknowledged that while it expects to grow the business and increase premium subscribers, this will be “relatively immaterial to wearable device revenue”.

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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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