Fitbit CEO talks smartwatch, corporate wellness on Q1 earnings call

By Jonah Comstock
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Fitbit is showing signs of rebounding after a weak Q4 that saw layoffs and restructuring for the wearable company. In its Q4 earnings call, the company reported a net loss per share of 15 cents, compared to a projected loss of 18 percent. 

“Twenty-seventeen marks a 10-year anniversary for the company,” CEO James Park said on the company’s earnings call. “We have accomplished much over this period of time. We have a large, growing base at more than 50 million registered device users, we have a broad global distribution footprint of more than 55,000 retailers, and we remain a global leader in wearables.”

Over the quarter, Fitbit sold three million devices for a revenue of $299 million. That’s due in part to the launch of its newest product, the Fitbit Alta HR, and the new sleep and social features that debuted with it. 

But going forward Fitbit will need to do more than just iterate on its wrist-worn trackers. On the call, Park articulated two distinct pathways for the company: it’s still-forthcoming smartwatch offering and its employee wellness business.

The call didn’t offer much news on the smartwatch product, other than that it’s on track for launch and that the price range won’t deviate from Fitbit’s existing range for products — between $59 and $300.

“Overall we are optimistic about the smartwatch category, and a lot of that optimism is driven by what we feel is going to be our own unique perspective when we launch our product,” Park said. “And that’s going to be a focus on health and fitness, but with the right general purpose functionality; long battery life coupled with an amazing interactive experience; and one of the largest, most effective fitness social networks. So I think all those things working together makes us pretty excited about the launch in our entry in this smartwatch category.”

Fitbit’s corporate wellness business is currently in use by more than 1,300 companies, Park said, but it only makes up about 10 percent of the company’s revenue. By reorganizing the business around distinct consumer and enterprise needs, Fitbit hopes to grow those numbers.

“Employee wellbeing, which includes not only physical health, but also social connectedness is increasingly becoming critical to overall corporate business strategy,” Park said. “Wearables and connected health and fitness devices play directly into this trend and employers are increasingly taking notice and subsidizing these options.”

Ultimately, Park believes that the consumer and enterprise businesses will reinforce each other.

“We believe these two groups are connected in virtuous circle where a large installed network and focused health and fitness brand make us the partner of choice for enterprise customers and health ecosystem players and, in turn, enable us to sell more devices to consumers who want to be part of the same network as their family, friends and colleagues,” he said.