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A Look at Fitbit’s Strategic Priorities

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Jul. 26 2018, Updated 9:01 a.m. ET

Growing user base

In this series, we’ve discussed how Fitbit (FIT) is grappling with declining sales driven by competition from peers such as Apple, Xiaomi, Garmin (GRMN), and Fossil (FOSL). Although Fitbit has sold 78 million devices to date, it has not managed profitability. However, it is still one of the global wearable market’s leading brands.

Fitbit has reported that its social fitness network now has a reach of 25 million active users, and that it has one of the largest exercise, activity, and sleep databases. Fitbit devices are sold in 86 countries and 47,000 stores. It is also the number-one health and fitness application in the United States on iOS and Android (GOOG) (GOOGL) phones.

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New product launch

Fitbit has introduced several products over the last few years, with the Versa and Ionic being its latest. Products introduced in the last 12 months accounted for 34% of Fitbit’s total revenue in Q1 2018.

Targeting the digital health space

Fitbit has acquired Twine, an innovative health coaching platform. The company is now looking at avenues other than device sales to drive revenue. Non-device revenue, which includes paid premium and Fitbit Health Solutions software revenue, rose 30% YoY in Q1 2018. However, non-device revenue accounts for just a small portion of Fitbit’s total revenue.

Partnership with Google

Fitbit has partnered with Google to move its data infrastructure to Google’s cloud platform. In a presentation, Fitbit stated that the two companies are working together “to drive positive health outcomes at scale, leveraging Google’s Healthcare API and Fitbit’s Health Solutions platform. Fitbit data will not share data, but leverage Google’s tools and machine learning.”

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