Can Fitbit’s Ionic Gain Share in Europe and Asia?
Fitbit’s US revenue fell in 2Q17
Fitbit’s (FIT) revenue fell almost 40% YoY (year-over-year) in 2Q17, compared with its 55% YoY revenue fall to $199 million previously. However, revenues from Europe and Asia-Pacific rose 9.2% YoY and 45% YoY, respectively, in 2Q17.
Fitbit believes Europe can drive revenues over the next few months as the smartwatch market in this region is estimated to grow at a fast pace.
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Fitbit stated that Europe, with its population of over 500 million people, is a bigger market than the US (SPY), where over 70% of smartphone users use an Android (GOOG) (GOOGL) OS (operating system). Fitbit CFO (chief financial officer) William Zerella stated: “We feel pretty good about growing Europe to be a larger and larger piece of the pie for our business.”
Australia accounts for almost 50% of Fitbit sales in Asia-Pacific. Fitbit and Apple (AAPL) compete with China’s (FXI) Xiaomi and Korea’s Samsung in the Asian market. Apple has traditionally found it difficult to penetrate Asian markets due to the high price point of its products.
Fitbit has announced a global partnership with Adidas and Fitbit’s Ionic wherein the former’s performance program expertise would be leveraged. This partnership might make the Ionic more visible to customers in China.