Fitbit stock fell 6.90%
Fitbit (FIT) stock closed down at $6.07 on July 20. The 6.90% fall in the stock price was due to the ongoing tariff war between the US and China (MCHI), which is denting a lot of US tech stocks, including hardware and semiconductor companies.
Tariffs impact Fitbit and other firms
The recent $200 billion worth of tariffs on Chinese goods are expected to impact the US-based hardware market including key devices like Apple Watch, Fitbit trackers, and Sonos speakers. The trade tariff war could be a hurdle for smart speaker maker Sonos, which recently filed for an initial public offering to take on dominating players like Amazon (AMZN) and Alphabet’s (GOOGL) Google. According to eMarketer, Amazon holds a 70.6% market share in the smart speaker market with its Echo devices, while Google Home has a 23.8% share.
Earlier, the Trump Administration said that Apple’s iPhones would be spared from the tariffs, but it seems that wearable devices have come into the tariffs’ trap. According to analysis from Reuters, President Trump’s tariff regulations will likely raise the costs of popular products including the Apple Watch, Fitbit Charge and Surge, and the Sonos Play:3, Play:5, and SUB ~10%. The tariffs will likely to go into effect this fall, which means that the tariffs might hurt the holiday season.
Fitbit’s position in the wearable market
According to International Data Corporation, Apple holds the top position in the wearable segment as of June 4, while Fitbit holds the third position, despite a 28.1% decline in unit shipments.
Last month, Fitbit launched its smartwatch Versa. Fitbit is trying to make a presence in the fast-growing smartwatch segment amid dwindling growth in the fitness tracker market. Despite competition from Apple Watch, Fitbit’s Versa was a huge success given its appealing design and attractive price. Notably, the company sold one million Versa smartwatches within two months of the product hitting stores. Fitbit has also launched new features, like female health tracking, to make its platform attractive.
However, the impact of the tariff war could change the outlook for Fitbit and other hardware firms’ devices in the wearable space.