Fitbit loses ground to competitors Apple, Xiaomi in wearable market
The fitness-band maker’s market share slid to 12% from 23% a year earlier
NEW YORK— Fitbit Inc. fell to third place in the wearable-device market in the first quarter, losing out to rival connected watches and fitness bands from Apple Inc. and Xiaomi Corp.
Fitbit’s share slid to12 per cent of all unit sales from 23 per cent a year earlier, according to data from market researcher IDC. The San Francisco-based company saw its dominance fade even as the overall device market grew 18 per cent to 24.7 million shipments worldwide. Xiaomi and Apple tied for first place, with about 15 per cent each.
Despite the emergence of new competitors, Fitbit had managed to hang on to its lead in wearables for several years, benefiting from its early arrival in the rapidly growing market. In the past year, demand has dropped as consumers turn to newer devices with more functions. Sales also took a hit last year because of manufacturing mistakes.
The company’s stock, which soared as high as $51.90 following a 2015 initial public offering, has plunged as investors lose faith in Fitbit’s ability to resuscitate demand with new products. Shares dropped1.7 per cent to $5.42 at 12:10 p.m. on Monday in New York, and are down more than 60 per cent in the past year.
“Fitbit finds itself in the midst of a transformation as user tastes evolve from fitness bands to watches and other products,” Ramon Llamas, an IDC analyst, wrote in the report. “This allowed Xiaomi to throttle up on its inexpensive devices within the China market and for Apple to leverage its position as the leading smartwatch provider worldwide.”
Chief executive officer James Park is betting that Fitbit’s impending smartwatch will reinvigorate demand and reach new consumers.
The company has acquired startups Coin, Pebble and Vector to help produce its first smartwatch.
Though Fitbit has a loyal base of users, its foray into the new category will face intense competition from Apple Watch and multitudes of cheaper Android watches.
As Fitbit tries to differentiate its newer products with its focus on fitness, Apple has also been doubling down in health tracking. Last month, Apple acquired Beddit, a maker of sleep-tracking hardware and software.