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Fitness Wearable Maker Fitbit To Cut Six-Percent of Its Staff Following a Disappointing Q4 (techcrunch.com)
As anticipated, wearable leader Fitbit kicked off the week by announcing a six-percent reduction in global work force, following disappointing fourth quarter financials. From a report: A preliminary statement issued this morning details the loss of 110 jobs, as part of a "reorganization of its business" designed to "creat[e] a more focused and efficient operating model." The news follows what has been a disappointing several months for the wearable space at large, impacting even Fitbit, the dominant player in the space. As rivals like Jawbone grapple with the future and the smartwatch space looks dismal, however, the Fitbit has been making acquisitions, including the once promising smartwatch pioneer Pebble, which met with its own struggles as the year drew to a close. The financials detail 6.5 million devices sold for the fourth quarter of last year, with quarterly revenue and annual revenue growth both falling below the company's guidance range.
But do you need the device? One needs to get on a treadmill, run around the block, ride a bike, attend aerobics, or whatever your favorite exercise is on a regular basis. Does a Fitbit help you with that?
Sure - for those motivated by the Gaming of Exercise (level up each day) it's a fabulous device. Serious runners want pacing help..okay (level beyond my ability). Those few who need/want/understand-why they want it must already have them. Saturated market.
The rest of the population though is asking "why do I need this?" -- you either work out or you don't and the "scale" gives you the only feedback you really need. You go for a run. Done. Fitbit tells you that you ran? I already know that. If I'm suffering from pantstootightist then I run more often and skip the pizza & beer. Fitbit isn't helping with how much goes In. It's a pretty bracelet that blinks the time.
I gave one to my wife recently and she has yet to take it out of the packing. But she still works out. I have an iWatch and love email/text integration and iPay. Oh - yeah it monitors my workouts. Sure it's fun to have this thing say "Good job - you worked out every day this week!!" Not that I get notification every week - the watch doesn't help me achieve the goal - rather notifies me when I do. But I see it as just an extravagant watch.
All told though - the notification that I've been sitting on my butt all day makes it worth it. Reminds me that there are more important things in the world and I should go home and play with the kids.
The wearable device bubble is ending, mainly because manufacturers are finding that they're not Apple. Even Apple is having trouble convincing the true believers to buy their first Apple Watches, let alone upgrade them. Fitbit and friends probably saw the following:
- A lot of the purchases are gifts or corporate giveaways from a company's health insurance plan. They get used for a while, then thrown in a drawer.
- Even among the hardcore users, there's very little reason to upgrade unless new must-have features, so you're not going to get the once-every-18-months cash infusions that Apple had recently been getting for iPhones.
- It's expensive to build and maintain the apps that attach the devices to the users' phones, and the data can't really be monetized the same way Google search history can.
Microsoft even dumped the Microsoft Band, probably realizing very similar things Fitbit did. The question is, are they hoping for an acquisition from a watch maker or something, and just trying to hold out long enough to get the founders their exit money? Also, why so many employees to design a hardware specification once, then build a simple phone app? Did they just get pumped full of startup money and go on a hiring spree?
Wearables are neat - I have one of the Garmin ones and it works well. But I'm not buying a new one every year.