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Inside Fitbit's 3Q17 Performance

PART:
1 2 3 4 5 6 7 8
Part 3
Inside Fitbit's 3Q17 Performance PART 3 OF 8

Why Is the Ionic so Important for Fitbit?

Ionic launched in September 2017

Fitbit (FIT) launched its long-awaited smartwatch, the Ionic, in September 2017. The smartwatch has a built-in GPS (global positioning system), heart rate monitoring, and personal coaching, and the device is water resistant up to a depth of 50 meters.

During Fitbit’s 3Q17 earnings call, CEO (chief executive officer) James Park stated: “The launch of Ionic not only enables us to enter the faster-growing smartwatch market, but it is also a platform for us to deliver our most powerful health and fitness tools into the market, furthering our mission to make the world healthier.”

Why Is the Ionic so Important for Fitbit?

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Ionic accounted for 50% of all smartwatch purchases from Amazon.com (AMZN) in the United States. It’s also the highest rated Fitbit product on Amazon in the first month of sale, with an average rating of 4.2 stars.

Fitbit also launched a companion wireless headset, the Fitbit Flyer, as well as a Wi-Fi smart scale, the Aria 2, which comes with improved accuracy. Fitbit believes that weight and body fat management are vital components of individual health. The firm stated that ~64% of consumers who exercise listen to music, which has created a demand for the wireless headphone.

According to Fitbit’s management, the Flyer is a natural product extension to the Ionic. Approximately 14% of Ionic customers have also purchased the Flyer.

Smartwatches to grow at 26.5% YoY until 2021

Market research firm IDC expects the overall wearable market to grow at a CAGR (compound annual growth rate) of 18.2% between 2017 and 2021. The smartwatch segment, which accounts for 57% of the total wearables market, is expected to grow 26.5% YoY till 2021.

However, Fitbit will be competing with established players such as Apple (AAPL), Samsung (SSNLF), Garmin (GRMN), and China’s (FXI) Xiaomi in the wearables space.

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