Fitbit sees slight sales bump but issues remain

Fitbit Global Shipments and Revenue

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Fitbit, one of the leading fitness tracker manufacturers, reported increased device sales in its Q2 earnings report.

This comes after a major decline in Q1, when the company posted its lowest device sales figure in years, but even this rebound points to a decline in the market for dedicated fitness trackers.

Fitbit sold 3.4 million of its trackers worldwide in Q2, up from 3 million the prior quarter but down from 5.7 million a year ago. Revenue also shrank year-over-year from $587 million to $353 million. And Fitbit’s share of the global wearables market dropped from 28.5% in Q2 2016 to 15.7% a year later, according to Strategy Analytics.

The overall downward trend in Fitbit’s sales is part of a broader decline in the market for fitness trackers. There are a few factors driving this trend:

Consumers are opting for low-end trackers or smartwatches, often leaving the middle of the market — where Fitbit used to dominate — without many buyers. This has led to Xiaomi’s emerging lead in the marketplace and to Apple’s growing prominence. Fitbit is looking to counter this trend by introducing its own smartwatch, which it plans to have ready for the holiday season this year.
Fitness trackers aren’t having the desired impact on people’s health and habits. A recent study in the UK found that teenagers who wore fitness trackers were less likely to exercise than their peers who didn’t wear the trackers.
And fitness trackers aren’t that accurate to begin with. Fitness trackers, according to a Stanford University study, don’t properly gauge the number of calories a wearer burns. This, and the potential health consequences of possible calorie-counting discrepancies, could hold back the growing interest in fitness trackers from insurance providers.

Fitness trackers might be past their heyday. Smartwatches often can do everything a fitness wearable can and more for just a little more money. And smartphones can offer many of the same basic functions, tracking steps and distance traveled. Fitness trackers were transitional devices, and now that consumers’ primary devices can accomplish most of the same tasks, the market for dedicated fitness wearables seems poised to fade away.

Laurie Beaver, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartwatches that:

Forecasts smartwatch shipments through 2021 for both overall device shipments as well as by operating system.
Provides an overview of the main players in both hardware and software, and how they will size up in the future.
Demonstrates the effect of Apple’s entrance into the market, and why it's unlikely to dictate future growth.
Gives insight into what technologies need to be worked on in order to incentivize future growth, the effects they will have on the market, and how they can be used.
And much more.

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