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Fitbit Has A Health Issue But A Pebble Could Fix The Problem

Fitbit has a health problem; however, the US technology Company is confident that they have the issue under control and that their acquisition of the Pebble watch brand will help the Company.

In the past Fitbit has been a top seller at JB Hi Fi and Harvey Norman however they were recently forced to lay off roughly 6% of its workforce due to poor sales and a move by phone makers to build similar technology that Fitbit is selling into their devices.

Sales fell to $299 million in the first-quarter revenue—compared with $505 million for the year-earlier period.

Though the results beat analyst expectations—investors reacted by sending the brand’s stock up 10% their future health is one of being in transition, according to Chief Executive and President James Park, who is also a co-founder. He and analysts expect Fitbit’s sales to be buoyed by the company’s launch of a smartwatch later this year.

“We’re optimistic about the smartwatch category,” said Park on a conference call to discuss the earnings. “A lot of that optimism is driven by what we feel will be our own unique perspective.” He noted that as Fitbit looks to streamline its fitness tracker assortment, it will also try not to overwhelm the consumer when it launches the smartwatch portfolio.

In recent years, the 10-year-old Fitbit has been a fitness darling with the benefit of being first-to-market with a product coveted by consumers. After going public in 2015, the brand ran its first Super Bowl ad last year and was considered a shoo-in for holiday gift lists. But added competition from other players, combined with a lack of major product innovation—most new releases are simply playing musical chairs with different features, according to one analyst—have led to souring sales.

Many are hoping the coming smartwatch will revive the flagging brand. Park announced in January that the company had acquired the assets of Pebble, Vector Watch and Coin.

“For Fitbit to turn things around, the smartwatch will have to be successful when it launches in 2017,” said Nick McKay, an analyst at Wedbush Securities.

Of course, the fitness-tracking brand will still have to contend with competition in the $10 billion smartwatch market, chiefly from the likes of Apple, though other brands like Fossil have also entered the space. Just this week, Garmin began airing two new TV spots in the USA, highlighting its own GPS smartwatches.

Produced in-house, the 30-second spots will help further the Swiss brand’s global push by airing in the U.S., U.K., Germany and France but not Australia.

Advertising Age said that experts expect Fitbit’s marketing dollars will be heavily invested in the crucial smartwatch launch later this year.