Fitbit, the wearable technology company, saw its shares rise dramatically on its first day of trading on the New York Stock Exchange. The initial stock price was $20 per share and closed at $29.68.
Fitbit, who say “We’re a passionate team dedicated to health and fitness who are building products that help transform people’s lives” make wristbands that in reality simply track your pulse, steps, distance, and calories burned – and syncs those statistics to your computer and select smartphones. There is no denying that taking the step to monitor your heart rate and activity is a good thing. But how Fitbit has become a world-wide phenomenon is an entirely different matter.
Actually, their business performance to date is good, they reported sales of $745.3 million last year, and $336.8 million in the first quarter of 2015, up 175% and 209%, respectively. Profit rose to $48 million in the first quarter of this year. There is no doubt that this is a company that is riding the crest of wave very well indeed. But will they manage to stay there, or will, they crash and burn.
Fitbit may be the market leader at the moment, and having users like the US President Barack Obama has certainly helped, by the competition is fierce. Neither are Fitbit first to market or market innovators, the wrist based heart monitor and pedometer has been around for some time. Certainly, pulse meters in watches first appeared over 20 years ago. So why has Fitbit been so successful. The answer, of course, is they have turned a simple piece of technology into a fashion statement, and done it very well. To continue with their success, however, they will need to think hard about what the next stage will be.
Already users are looking towards the services behind the device. Fitbit will need to look at how they can provide value-added services to the basic hardware proposition, Julie Ask of Forrester Research suggests: “Fitbit success will hinge on factors like moving its devices into the enterprise with healthcare pay or support, and offering customer value beyond the thousands of free health and wellness apps out there.”
Fitbit have indicated that they will use the money from the IPO to research and develop ideas in this are, if they stick by their publicly stated mission, then maybe they will sustain their success.
