United States and EMEA
James Park, the CEO (chief executive officer) of Fitbit (FIT), stated that the company is currently comfortable with store count in the United States (SPY) and Canada (EWC). It’s focused on increasing volume to these outlets with the help of retail partners. Revenues in the United States increased 42% YoY (year-over-year) in 2Q16 and 30% YoY in the first six months of 2016.
In EMEA (Europe, the Middle East, and Africa), devices sold rose 100% YoY, driven by increasing demand from key European markets. Fitbit believes Europe presents an opportunity to increase its store count in the long run. Sales in Europe were driven by Blaze and Alta. The company also reaped the benefits of investing in localized marketing, PR (public relations), and advertising.
Sales in China
In China, online sales accounted for a higher percentage of retail sales compared to the United States. Fitbit launched the Chinese, Korean, and Japanese versions of Blaze and Alta in the respective markets. In order to penetrate international markets, Fitbit is focusing on localization, which will drive sales.
Growth and opportunity
Fitbit has compared the smartphone penetration with its device sales. According to the company, “Smartphone penetration provides a reasonable point of comparison for addressable opportunities in different markets as we believe a significant portion of smartphone users can become Fitbit users over time.”
In 2016, analysts expect more than 2 billion smartphones to be used around the world. At the end of 2Q16, Fitbit shipped more than 35 million units in the United States since its inception, which represent 15% of the 230 million smartphones in the United States.
In its five premier international markets—the United Kingdom, Germany, France, Spain, and Italy—Fitbit has sold 5.0 million devices against a potential market of around 200 million smartphones. Fitbit has sold 4.0 million devices in Asian markets such as Australia, China, India, Japan, and Korea against a total potential market opportunity of 1.1 billion smartphones.
Park said, “At the pace at which we can develop these markets, we expect to have tremendous long-term opportunity and will continue to evolve and expand our products and experiences to engage consumers with their health.”
Of the 23 analysts covering Fitbit, 13 have issued “buy” recommendations, and ten have recommended a “hold.”
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