Fitbit Turns To Smartwatch Market After Poor Q4
As tipped yesterday, Fitbit’s latest earnings report has fallen short of previous forecasts amid a slowdown in the wearables market.
In a report to investors, Fitbit announced “preliminary” financial results for the final quarter of 2016. They indicate they sold approximately 6.5 million devices and brought in between $572 and $580 million in revenue.
These financials come in somewhat short of the company’s original guidance range of between $725 and $750 million.
“Fourth quarter results are expected to be below our prior guidance range; however, we are confident this performance is not reflective of the value of our brand, market-leading platform, and company’s long-term potential,” said Fitbit co-founder and CEO James Park.
Park says they experienced softer-than-expected holiday demand for trackers in our “most mature” markets but made rapid gains in the EMEA region, with revenue growth of 58% for the quarter.
“Looking forward, we believe Fitbit is in a unique position to stimulate new areas of demand by leveraging the data we collect to deliver a more personalized experience while developing upgraded versions of existing products and launching additional products to expand into new categories,” He says.
Accordingly, Park says that Fitbit will be looking to cut costs where it can “while maintaining necessary investments to drive future growth and maintain its global leadership position in the wearables market.”
The financial report confirmed an internal realignment of marketing spending and a restructuring of the company’s workforce that will impact 110 employees.
Park also confirmed Fitbit’s rumored intentions to move into the $10 billion smartwatch category wholesale, something many expected after the company’s recent acquisitions.
“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness. With the recent acquisition of assets from Pebble, Vector Watch and Coin, we are taking action to position the company for long-term success,” Park says.
Fitbit’s stock price down has slipped 12% following the announcement.