Fitbit, one of the pioneer companies behind the fitness band and fitness technology revolution have announced record revenue growth on todays earnings call. This is especially impressive in light of the much more rigorous competition in the space, not least form the likes of the Apple Watch and the new releases coming from more established technology brands, such as Asus.
Fitbit announced that their revenue is up 168% year on year from Q3 2014. This comes on the back of news that their brand equity – the amount of people who recognise the name ‘Fitbit’ – has grown 300% over the past twelve months.
The Apple watch was expected to be a game changer for the wearable technology space. With Apple’s pedigree for launching category killer products, it was anticipated that their much discussed and rumoured watch was going to wipe out the newcomers who had previously defined the fitness band space. However, on the contrary, Fitbit have been able to all but dismiss the Apple Watch in light of this earnings call. Fitbit’s co-funder James Park stated that the Apple Watch had made “no material impact” on sales and stated there are “two very different segments in the market”, with regards to cost and user experience.
His figures would appear to back him up. Having driven 4.8 million sales, and growing their revenue to $409.3M in Q3 2015, Fitbit act as further evidence of the increasing consumer appetite to buy fitness gadgets. The company expect to drive $620m in Q4 2015, not least to do with the popularity of these products and the Christmas gold-rush boom. Wearables like Fitbit have previously been red-hot xmas gifts, due to their price point and appeal to gadget loving fitness geeks.
The next challenge for Fitbit – and the market in general – is to take their fitness band success and to translate it into the smart watch arena. To date, as acknowledged by Fitbit’s CRO Woody Scal, is still “more hype than reality.” Scal acknowledges that many consumers are still asking “why do I want one?”
Compared to the fitness niche friendly bands, smart watches are expensive, offer much of the same and are still perceived as geeky. Bands on the other hand are increasingly seen as cool-chic, acting as much as a fashion accessory as they do a fitness product. However, clearly that’s not to their detriment with sales figures like these.
Can Fitbit continue to see off the challenge of Apple? Let us know in the comments below.