About Fitbit, Inc.
Fitbit is counting on you to step up and step out to get in shape. The company's wrist-worn fitness tracking devices are some of the most popular in the emerging fitness market. Its line of devices track steps, calories burned, and duration of activity. Other measurements taken by the spectrum of Fitbit devices include sleep duration and quality, heart rate, and distance and route. All Fitbit devices sync with computers and some sync with apps on mobile devices to show feedback. More than 45,000 stores carry Fitbits including Best Buy, Target, and Dick's Sporting Goods, as does Amazon.com. The company also sells devices through corporate wellness programs.
While Fitbit develops the sensors, algorithms, and software for its products, the devices are made by contract manufacturers, mainly Flextronics. Fitbit devices range in price from about $60 for the entry level Fitbit Zip up to $250 for the Fitbit Ionic, which has the features of a GPS watch, heart-rate tracker, activity tracker, and smartwatch. The company updates its products through wireless connections. Fitbit also sells a WiFi-enabled scale, called Aria, that tracks weight, body fat percentage, and body mass index.
The company offers premium services, for which customers pay extra. They include virtual coaching through customized fitness plans and interactive video-based exercise on mobile devices and computers. The company's open application programming interface (API) allows third-party developers to create health and fitness apps for Fitbit's platform.
Fitbit is headquartered in San Francisco and has another US office in Boston. It also has operations in Australia, Shanghai, Dublin, Hong Kong, Seoul, Minsk, New Delhi, and Tokyo.
About 60% of Fitbit's sales come from the US, with about 25% from the Europe, Africa, and Middle East region, and 7% each from the Asia/Pacific region and the Americas excluding the US.
Sales and Marketing
Fitbit sells mainly through several distributors and some 45,000 retail stores, which often have dedicated displays. Best Buy and Amazon.com account for 10% or more of sales each. The company also gets about 10% of sales through its website.
Fitbit quickly racked up sales with revenue rising more than 500% from 2013 through 2016 before a slowdown in 2017.
After peaking at $2.2 billion in 2016, revenue tumbled 27% to $1.6 billion in 2017. The company’s sales were affected by the bankruptcy of a major customer and a slowdown in device sales because of competition on the high end of the market. The company sold 30% fewer devices in 2017 than the year before. Somewhat offsetting the drop, Fitbit raised prices an average of 8% in 2017 with the help of higher-priced special edition devices.
Costs associated with the customer bankruptcy and a Fitbit restructuring helped deepen the company’s net loss to $277 million in 2017 compared to a $103 million net loss in 2016. The company had posted profits in 2014 and 2015.
Fitbit’s cash rose to $342 million in 2017 from$301 million in 2016.
Fitbit is a leading fitness tracking device company, according to research organizations like International Data Corp. and NPD Group. The market for fitness devices is still young and competition is intense. Companies with ample resources such as Apple with its Apple Watch and Google are joined by Garmin, Under Armour, Misfit, Xiaomi, and others in the fitness device race. Fitbit has responded by moving its devices to the higher end of the spectrum, with more functions and features and higher prices.
The company has marked international markets as opportunities for expansion. Some of its sales and marketing budget goes to expand distribution channels, the number of retailers, and strategic partnerships internationally.
Fitbit is moving beyond corporate wellness programs (in which companies outfit employees with Fitbit devices) to become a provider of health information. The company has partnered with Google to provide information collected from Fitbit users to physicians and researchers. The collected data would be analyzed to capture information about fitness and wellness.
Fitbit is under pressure to keep its cybersecurity operations tight because of the personal information it gathers and anonymizes. The data include names, addresses, phone numbers, email addresses, payment account information, height, and weight, as well as heart rates, sleeping patterns, GPS-based location, and activity patterns. A breach that exposes the data could open the company to litigation and a lack of trust from consumers.
In 2017 Fitbit cut costs through realignments and workforce reductions (about 6%). It reduced general and administrative costs as well as sales and marketing expenses (advertising spending dropped to $226 million in 2017 from $317 million in 2016), but it increased research and development investment ($340 million in 2017 and $320 million in 2016).
199 FREMONT ST FL 14
San Francisco, CA 94105-2253
Phone: 1 (415) 513-1000
Employer Type: Publicly Owned
Stock Symbol: FIT
Stock Exchange: , NYSE
VP Operations: Patrick McGivern
Chairman, President, and CEO: James Park
CFO: William Zerella
Employees (This Location): 277
Employees (All Locations): 1,694