Smartwatch Sales Drive Fitbit to Profitability

Posted on November 1, 2018 by Paul Thurrott in Fitbit, Wearables with 8 Comments

Fitbit Launches More Affordable Smart Watch and Tracker

As part of its quarterly earnings announcement, Fitbit announced that half of its revenues now come from smartwatch sales.

“We are now the number two player in the smartwatch space in the U.S., a category we just entered with zero share only fourteen months ago,” Fitbit co-founder and CEO James Park said in a prepared statement. “We also launched our most advanced tracker yet, Fitbit Charge 3, which is blurring the lines between trackers and smartwatches and is already one of the top selling devices in the U.S.”

Fitbit posted net income of $10 million on revenues of $394 million in the quarter ending September 30. It sold 3.5 million devices in the quarter, down slightly from the 3.6 million in sold in the same quarter a year ago. But because the device mix has shifted since then—49 percent of Fitbit’s device sales are now smartwatches—so, too, has the average selling price (ASP). So Fitbit is earning more—$108 on average—per device sold.

This shift enabled Fitbit to return to profitability, too: In that year-ago quarter, the firm lost $2.8 million. And with the number one player in the smartwatch market, Apple, selling its products for double or more the cost of a Fitbit Versa, the hope is that this trend will continue.

 

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Comments (8)

8 responses to “Smartwatch Sales Drive Fitbit to Profitability”

  1. Skolvikings

    I'm seeing more and more Apple Watches on wrists nowadays. I still don't see the appeal of spending $400 on a watch but good for them if that's their thing. I stick with my Fitbits and I'm just happy with that.

  2. Rob_Wade

    Excellent. Anything that takes away from Apple, I'm good with. I hate Apple with a passion.

  3. wolters

    This is good news for Fitbit. My wife has gone back and forth on her smartwatches...she gets in the mood of needing notifications but then wants something great for health. She has gone from Microsoft Band to WearOS, to Fitbit, back to WearOS, back to Fitbit and finally on the Galaxy Watch. She tried the Versa and it still wasn't that great. She has been searching for the balance of fitness and smartwatch and didn't want to go iPhone/Apple Watch. The Galaxy Watch is meeting that need. Samsung Health offers robust fitness options and it is terrific at notifications and responding to messages.

  4. provision l-3

    I really didn't think Fitbit would make it back to profitability, kudos to them.

  5. MrKirbs

    Always nice to see others succeed where Microsoft should've :|

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