Here’s the thing: if you’re going to limit your company to creating and selling only one product, a slump in sales is going to happen sooner or later.
And that’s the case for Fitbit.
Although the company has been going strong for 10 years, selling more than 15 million devices a year, they have recently faced some tough times – and I can only imagine it’s all thanks to a saturation of Fitbits and similar products in the marketplace.
As a result, BBC reports that the San Francisco-based business saw its annual sales fall by almost a third to $1,6 billion (R19,27 billion) last year, while losses more than doubled to $277 million (R3,3 billion).
That’s a lot of millions.
Co-founded by James Park [above] in 2007, Fitbit is essentially a smartwatch that records a user’s heart rate, the number of steps they have walked, and other exercise statistics:
In the mid-2000s, fitness fans were using low-end pedometers to track their steps, but nothing truly digital had come to market.
However, when Fitbit launched it filled a gap in the market and grew fast.
The success of the company was helped by the development of its app, which enabled users to connect and compete with each other online.
“We saw how the social aspect of Fitbit motivated people to exercise,” says Mr Park. “We found that every friend you add to your Fitbit community increases your steps-per-day by 700.”
Fitbit grew fast and it listed on the stock market to much hype on 17 June 2015. Its shares reached a peak of almost $50 in July 2015, but they are now trading around the $5 mark.
Claiming the chief executive title, Park is confident that he can turn things around because, well, Fitbit is expanding into the healthcare sector:
This year Fitbit invested $6m in Sano, a company developing a coin-sized glucose monitor that users would wear on their skin like a patch.
It is also working with bio-tech firm Dexcom on ways to let Fitbit users track their glucose levels on their smartwatches.
“We want to grow our business beyond wearables,” Mr Park says.
“In five years from now, I want people to see us as a consumer electronics company but also as a digital health company that provides both devices and software to help people meet fitness goals or manage health conditions.”
But Ramon Llamas, a technology analyst at research group IDC, says that Fitbit needs to expand quicker in order to better compete:
“Fitbit collects immense amounts of data on how people get fit, but what else can you do with that data?” he says.
“If I was a Fitbit user, I’d want insights and advice that can help me. But they aren’t providing that.”
So, how’s that Fitbit lifestyle going?
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