Fitbit says it will release a new smartwatch later this year
Smartwatches are in an interesting spot right now. Sales of Android Wear devices seem to have stalled, the Apple Watch is leveling off, and Fitbit (the maker of what is currently one of the most popular wearable lines) has been acquiring smartwatch startups like Pebble and Vector over the past year. This last point may be unfolding into something much larger; Fitbit announced yesterday that its highly anticipated smartwatch, which was delayed earlier this year, would be ready for a holiday season release.
On an earnings call, Fitbit CEO James Park said that the device would feature Fitbit’s signature health and fitness tracking tools as well as GPS, 5 BAR water resistance (up to 50 meters), and a battery that will last for days. This puts the wearable in direct competition with other smartwatches, like the Apple Watch and the numerous Android Wear-based devices.
This is a segment with which Fitbit has struggled in the past. As new smartwatches have started adding heart rate monitors and improved fitness tracking capabilities over the past year, Fitbit has seen its revenue decline. Most Fitbits are good enough for step counting, heart rate monitoring, and rudimentary workout metrics, but other wearables can answer phone calls, send text messages, check email, and much more.
Fitbit did beat expectations for the second quarter, raking in about US$353 million (compared to the US$341 million that analysts predicted). However, the company also reported year-over-year revenue contraction of 55%, likely due to aging hardware and the lack of any new “must-have” devices. In fact, Samsung recently overtook Fitbit in wearable sales.
One could argue that the smartwatch market is becoming so saturated that a new device wouldn’t make much difference. However, a fresh smartwatch from a major player like Fitbit will definitely make a bigger splash than from companies with a smaller presence in the wearables market like Xiaomi or Asus. However, Fitbit needs the ripples created by a new smartwatch to be big and long-lasting; whether or not a new release will refresh what is quickly becoming a stagnant market remains to be seen.
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