Fitbit to cut $200M in jobs & expenses after encroaching Apple Watch sales cut into market...

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in Apple Watch
Fitbit -- Apple's main competition in the wearables space -- announced a reorganization on Monday in the aftermath of a weak fourth quarter, that includes the layoff of 6 percent of its workforce.




The changes should reduce costs by about $200 million, but at the expense of 110 people who will lose their jobs, according to Engadget. The company sold 6.5 million units during the December quarter, generating $580 million in revenue -- it had however expected a figured between $725 million and $750 million, helping to bringing its annual growth down from a forecast 25 percent to just 17 percent.

CEO James Park blamed "softer-than-expected holiday demand for trackers in our most mature markets, especially during Black Friday," but did point to fast growth in some markets like the EMEA (Europe, Middle East, and Africa) region.

Fitbit has traditionally specialized in dedicated fitness trackers and dominated the wearables market, but previous reports indicated it lost some sales to the Apple Watch in the month running up to Cyber Monday. While more expensive and limited to iPhone owners, the Apple Watch is a multi-purpose device, and in its Series 2 incarnation is better suited for fitness applications than the original release thanks to waterproofing and built-in GPS.

To compete more directly, Fitbit recently bought out two smartwatch makers, Pebble and Vector, the latter headed by former Bulova, Citizen, and Timex executives. It has also picked up Coin, which could translate into an alternative to Apple Pay on future devices.

At CES, Park said that Fitbit is even working on its own app store, which while unlikely to challenge stores belonging to Apple or Google could possibly expand the usefulness of the company's products.
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Comments

  • Reply 1 of 32
    Sorry...
  • Reply 2 of 32
    i'd rather have a nice-looking, versatile, more expensive apple watch than an ugly, disposable fitbit. very happy with the stainless steel series 0 with leather strap for going out and rubber for the gym. 
    am8449radarthekatwatto_cobra
  • Reply 3 of 32
    Is the Apple Watch still being called a failed a product in the midst of so many competitors actually having failed or failing products? Also, wasn't market share size considered more important than profit size?

    One VERY nice thing about Fitbit's falter admission this close to Apple's earnings announcement is IDC and others will not be able to publish Pro-Fitbit reports hat disparage Apple Watch later today or tomorrow! 😘
    am8449caliwatto_cobranetmage
  • Reply 4 of 32
    blastdoorblastdoor Posts: 1,588member
    This market will eventually be huge and Apple is well positioned to dominate it.

    However, to realize its potential Apple will need to simultaneously move several wearable product lines forward at once. It can't be just Watch. It needs to be Watch plus AirPods plus maybe a half dozen other things. Apple has to figure out how to do that. 
  • Reply 5 of 32
    lkrupplkrupp Posts: 4,614member
    Is the Apple Watch still being called a failed a product in the midst of so many competitors actually having failed or failing products? Also, wasn't market share size considered more important than profit size?

    One VERY nice thing about Fitbit's falter admission this close to Apple's earnings announcement is IDC and others will not be able to publish Pro-Fitbit reports hat disparage Apple Watch later today or tomorrow! 😘
    It’s become fashionable to trash Apple hardware and software. Declaring an Apple product as “failed” is sort of required for a nerd’s street credibility. Meanwhile on CNBC this morning they were discussing Fitbit’s 20% decline in stock price to around $5.45 and Jim Cramer made the argument that Fitbit is a commodity product whose time in the sun has ended. He then proceeded to display his Watch and said ti does everything he needs it to do. I know, I know, the usual suspects here will call him an Apple shill. Gotta maintain that negativity quotient for all things Apple.
    radarthekatcaliwatto_cobraflashfan207netmage
  • Reply 6 of 32
    tjwolftjwolf Posts: 106member
    blastdoor said:
    This market will eventually be huge and Apple is well positioned to dominate it.

    However, to realize its potential Apple will need to simultaneously move several wearable product lines forward at once. It can't be just Watch. It needs to be Watch plus AirPods plus maybe a half dozen other things. Apple has to figure out how to do that. 
    I can't even imagine half a dozen other things, much less think Apple needs them to dominate the wearable space.  I think, aside from the Airpods, they need only one more crucial wearable: an AR device - i.e. either cool glasses or contacts.
    cali
  • Reply 7 of 32
    dachardachar Posts: 215member
    Sorry to hear about the job losses. My son had a Fitbit for Christmas a year a go. I have to say it seems poor quality. The synchro is very sluggish, the clock looses a few minutes after 3 or 4 days and sometimes the software freezes. We would not recommend it to friends and are unlikely that we will buy another one. If this is a typical experience Fitbit will loose a significant number of customers long term unless they can really improve.
  • Reply 8 of 32
    My wife and I love our Apple Watch Series 2's. Both as a fitness tracker and as a smartwatch. Didn't mind paying more since they do more and are actually something you'd like to wear.
    StrangeDayscaliwatto_cobra
  • Reply 9 of 32
    I hate hear of any job losses although Wall Street loves to hear when any particular company is putting another company out of business. How they gleefully report that one company is crushing another by grabbing total market share percentage. What a bunch of greedy jackasses. Wasn't Fitbit supposedly crushing Apple? Apple was the company doomed for losses because NO ONE was buying AppleWatches when you can buy a Fitbit for one-third the price. It's obvious quality doesn't matter to anyone on Wall Street. It's always "Buy something cheaper because it's just as good." Such a foolish attitude. There has to be some people who want quality products that last a long time. That's how it was when I was growing up. Now it's buy something cheap you can replace every year. That kind of thinking is hard on the ecology.

    I believe every company should have its own philosophy on serving consumers. Why Apple is being criticized for that, I have no idea. There's a lot I don't understand about Apple but their products do last a long time and to me that's worth paying extra for. What is so much fun about trashing any company trying to give consumers decent products? Don't these dumbasses have any common sense at all. There are consumers who want Fitbits and there are consumers who want AppleWatches. Why does there always have to be this crazy competition to wipe out one or the other?
    edited January 30 radarthekatjas99calinetmage
  • Reply 10 of 32
    brucemcbrucemc Posts: 947member
    ... There has to be some people who want quality products that last a long time. That's how it was when I was growing up. Now it's buy something cheap you can replace every year. That kind of thinking is hard on the ecology.

    I believe every company should have its own philosophy on serving consumers. Why Apple is being criticized for that, I have no idea. There's a lot I don't understand about Apple but their products do last a long time and to me that's worth paying extra for. What is so much fun about trashing any company trying to give consumers decent products? Don't these dumbasses have any common sense at all. There are consumers who want Fitbits and there are consumers who want AppleWatches. Why does there always have to be this crazy competition to wipe out one or the other?
    I like Apple for a number of reasons, but this is probably top of the list.  Their products are better made, last longer, have higher resale value, better fit & finish for tech products, etc.  
    StrangeDayscaliwatto_cobranetmage
  • Reply 11 of 32
    brucemcbrucemc Posts: 947member

    tjwolf said:
    blastdoor said:
    This market will eventually be huge and Apple is well positioned to dominate it.

    However, to realize its potential Apple will need to simultaneously move several wearable product lines forward at once. It can't be just Watch. It needs to be Watch plus AirPods plus maybe a half dozen other things. Apple has to figure out how to do that. 
    I can't even imagine half a dozen other things, much less think Apple needs them to dominate the wearable space.  I think, aside from the Airpods, they need only one more crucial wearable: an AR device - i.e. either cool glasses or contacts.
    Agree.  Some other wearables category may come up, but I can't think of one right now.  Apple Watch provides the screen for UI & likely most health/fitness functions.  AirPods provide the audio input/output, which leaves a requirement (of some kind) for vision.

    I am continuing to see more & more Apple Watches in the wild.  Sometimes it is someone who said they wanted one and finally got it for Christmas or birthday, or some cases it is a spouse who received one and thought they would hate it, but now they never take it off.  This is going to be a much slower growth than iPhone, but wearables will be the next largest consumer electronics market by value (ahead of home automation including digital assistants for home, dedicated VR,...).
    watto_cobra
  • Reply 12 of 32
    brucemcbrucemc Posts: 947member

    Is the Apple Watch still being called a failed a product in the midst of so many competitors actually having failed or failing products? Also, wasn't market share size considered more important than profit size?

    One VERY nice thing about Fitbit's falter admission this close to Apple's earnings announcement is IDC and others will not be able to publish Pro-Fitbit reports hat disparage Apple Watch later today or tomorrow! 😘
    No, the new narrative is that Apple is doomed by being behind in home voice assistants vs. Alexa and Google Home.  Oh and Microsoft makes better computing hardware.
    StrangeDayswatto_cobranetmage
  • Reply 13 of 32
    blastdoor said:
    This market will eventually be huge and Apple is well positioned to dominate it.

    However, to realize its potential Apple will need to simultaneously move several wearable product lines forward at once. It can't be just Watch. It needs to be Watch plus AirPods plus maybe a half dozen other things. Apple has to figure out how to do that. 
    You're on to something, Blast. Well said. 
    blastdoor
  • Reply 14 of 32
    dewmedewme Posts: 754member
    The only feature I really miss on the Apple Watch is sleep tracking. I wish Apple would come up with something akin to the AirPods dock for the Apple Watch that also includes a thin band-only "sleep data collector" that links and syncs to the watch dock and/or watch. I don't want to sleep with the watch on because it's too big and needs to be recharged but I really miss having sleep data, which I sorely need. A bedside watch dock would satisfy a few use cases; recharging the watch, alarm clock mode for the watch, sleep data collection, etc. The band-only sleep data collector could also include a haptic feedback module to wake you up silently in the morning or periodically throughout the night if you need to take medications, attend to a child, attend a virtual meeting in a different time zone, etc. Upon waking, the band-only data collector would replace the watch in the dock so it charges during non-sleep hours. 
    caliwatto_cobraflashfan207
  • Reply 15 of 32
    k2kwk2kw Posts: 524member
    dachar said:
    Sorry to hear about the job losses. My son had a Fitbit for Christmas a year a go. I have to say it seems poor quality. The synchro is very sluggish, the clock looses a few minutes after 3 or 4 days and sometimes the software freezes. We would not recommend it to friends and are unlikely that we will buy another one. If this is a typical experience Fitbit will loose a significant number of customers long term unless they can really improve.
    The race to be the cheapest usually results in either one-hit-wonders like the pebble or other products that don't deliver enough satisfaction that users want to upgrade on future product releases.
    watto_cobra
  • Reply 16 of 32
    k2kwk2kw Posts: 524member
    dachar said:
    Sorry to hear about the job losses. My son had a Fitbit for Christmas a year a go. I have to say it seems poor quality. The synchro is very sluggish, the clock looses a few minutes after 3 or 4 days and sometimes the software freezes. We would not recommend it to friends and are unlikely that we will buy another one. If this is a typical experience Fitbit will loose a significant number of customers long term unless they can really improve.
    The race to be the cheapest usually results in either one-hit-wonders like the pebble or other products that don't deliver enough satisfaction that users want to upgrade on future product releases.
  • Reply 17 of 32
    I actually love the fitbit ecosystem and waited all year for Black Friday deals, only to find that fitbit didn't have any.  Unless you call $20 off a $150 watch a "deal".  It's their own fault they blew black Friday.  And their response is to fire a hundred people, whom I assume weren't the ones who decided against Black Friday discounts?

  • Reply 18 of 32
    maestro64maestro64 Posts: 3,324member

    Did I read that right Apple is causing fitbit pains, but, but, but... IDC said fitbit is the king of the Hill, when you're on top of the pile looking down on all those who you conquered on the way up should not be cutting costs and putting people out of jobs. This make no sense, IDC and others said market share and selling the more widgets makes you the most successful company around.

    I feel bad for the people at a company like this, you know they people running was hyping them all up and said how great they were in reality they knew what was coming and I bet the upper management got their money and built big homes and are moving on like did nothing wrong. You do not go out and by a competitor when your own future is at risk, Oh I forgot when grow is slowing go and buy the competitor to grow you market share, Yeah another great Wall Street Tactic. Chalk up and another company who Wall Street screwed over so they can make money hyping the stock going up and shorting it on the way back down.


    edited January 30 watto_cobra
  • Reply 19 of 32
    I actually love the fitbit ecosystem and waited all year for Black Friday deals, only to find that fitbit didn't have any.  Unless you call $20 off a $150 watch a "deal".  It's their own fault they blew black Friday.  And their response is to fire a hundred people, whom I assume weren't the ones who decided against Black Friday discounts?

    yeah but if a company is dependent on BF sales that doesn't seem healthy. 
    watto_cobranetmage
  • Reply 20 of 32
    k2kwk2kw Posts: 524member
    blastdoor said:
    This market will eventually be huge and Apple is well positioned to dominate it.

    However, to realize its potential Apple will need to simultaneously move several wearable product lines forward at once. It can't be just Watch. It needs to be Watch plus AirPods plus maybe a half dozen other things. Apple has to figure out how to do that. 
    Yes the Apple Watch will get more and more important down the road as gps, LTE, and cellular are added.

    I wish Siri would get better because it's the preferred method of interacting with the watch .   

    The watch will be big when stand alone apps that customers pay for in the apps store become popular.   The watch will be an app platform like the phone,iPad, and tv.

    Once a cell watch is released, I would like Apple to do a high end consumer camera running iOS.   
    cali
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