Fitbit & Tile To Stop Manufacturing In China
Fitbit whose products are popular with CE retailers in Australia along with Bluetooth tracker Tile is set to stop manufacturing in China in an effort to avoid U.S. tariffs.
Shares in the San Francisco-based Company fell 2% in New York, leaving them down 27% this year as analysts and investors give little credit to Companies such as Go Pro and Apple who are moving to exit manufacturing in China.
Fitbit joins other U.S. companies moving out of China amid an ongoing trade war between the two countries.
Bluetooth tracker Tile which makes Bluetooth-enabled location trackers and yesterday launched new products in Australia, is also pulling the plug on their China manufacturing operation.
Currently Apple is battling with the White House over requests to get the iPhone and other products off the list of Chinese-made goods slated to be hit with tariffs on Dec. 15.
“This is a great example of companies making proactive decisions to mitigate tariff related-risk by, in this case, taking their entire supply chain out of China,” said Tom Forte, an analyst at D.A. Davidson. Others “may choose to follow suit as this trade war gets long and diffuse, and potentially escalates.”
Davidson, who has a buy rating on Fitbit, said the stock market isn’t giving companies enough credit for their efforts to mitigate tariff-related risks. “I expect that as earnings season comes, we’ll be hearing a lot more about this from companies.”