Fitbit, a wearable equipment company, reported results for the first quarter of 2018, and financial data fell again. However, while many challenges remain, this year may look like a year when companies are starting to catch up.
Fitbit 2018Q1Quick overview of financial report data:
Source: Fitbit Quarterly Bulletin
New Hope: smartwatch Versa
At first glance, Fitbit had a worrying quarter, with almost all indicators falling. The only bright spot was expected cost control, with revenue costs down 26 per cent year-on-year. In fact, there is some good news about the future of the company. Fitbit is also actively trying to transform after consumer demand has shifted to more advanced smartwatches.Sales figures for smartwatches, which account for 30% of revenue this quarter, almost double what they were three months ago, offer new hope.Although the Ionic, the first smartwatch product, has received some criticism, it is still the main driver of smartwatch sales growth.
Fitbit launched its new product Versa around the world last month in the hope that the smartwatch will attract mass users. Gave up the strategy of competing with Apple Inc smartwatch.Versa tries to win with competitive prices, similar features and longer battery life.Compared with $329 for Apple Watch and $249 for Ionic, Versa starts at $199.
The launch of Versa has received a lot of positive comments.Fitbit said smartwatches will be the main product to be sold later this year, and the increase in unit sales prices should be profitable.Fitbit's app store currently has only 750 options, compared with Apple Inc's more than 2 million apps, its app store is still limited. But considering that the product is only six months old, the number of app on this scale is commendable.
In order to obtain the residual value of backward power tracking equipment, all trackers will share an operating system to simplify manufacturing and reduce costs. The children's Ace tracker released at the same time as Versa will become a simplified template for the tracker.Fitbit has not completely abandoned this market segment because its motion tracking devices still sell well in emerging markets as entry-level products.
Photo Source: Fitbit
Future: software + Healthcare
James Park, Fitbit's chief executive, has long talked about transforming into a healthcare business, not just a device vendor.Although motion tracking can help users solve problems such as diabetes, heart health, sleep and mental health, the existence of Fitbit is similar to that of hardware manufacturers. In the fierce competition among major manufacturers, this means huge fluctuations in revenue and profits.
Fitbit's recent move could lay the foundation for a radical change in the status quo. Fitbit acquired the health coaching service Twine Health in the first quarter, and its co-founder, Dr. John Moore, is now Fitbit's first medical director. The recent agreement with Alphabet's Google Cloud Healthcare API aims to integrate data collected by Fitbit into the healthcare sector, making it easier for health professionals to collaborate and help patients. Fitbit also said it would introduce advanced features and subscriptions for consumers to boost revenue other than hardware later this year.
Fitbit's recovery seems to take longer than management expected, but CEO and the company believe this year will be the year to lay the groundwork for a return to growth.As Fitbit eventually becomes a smartwatch maker and provides software services to healthcare and health-conscious consumers, it may have a new source of revenue that is not sold on physical devices by the end of 2018.
(this article is produced by Futu Information compilation team, compiled / Ni Jingwen, proofread / Yang Weiyi)