Fitbit, Leader in Volume Sales of Cheap Fitness Bands, Plunges 16%, Cuts 6% of Staff, Lowers 2017 Forecast
Last week Patently Apple posted a report titled "In Q4 Apple Remained the King of Pure Smartwatch Sales within a Market that Requires a Little Shock Therapy." Kantar reported last week that in Q4 2016, Apple extended their market share lead to 50% in the pure smartwatch market while Fitbit captured 50% of the simpler and cheaper fitness band market – a market Apple doesn't participate in.
We're learning today that being the king of cheap fitness bands may have earned Fitbit big headlines in the press that overshadowed the success of the Apple Watch, but today the headline over at Barron's is rather stark: "Fitbit Plunges 16%: To Cut 6% of Staff After Slashing Outlook." It should strike the press right between the eyes that this so-called wearables market "leader" makes no money. I rather doubt we'll be hearing a headline like that coming from Apple after they announce their financials tomorrow.
According to the Barron's report, "Shares of fitness wearables pioneer Fitbit (FIT) are down $1.11, or almost 16%, at $6.10, in pre-market trading, after the company slashed its revenue outlook, and offered a forecast for this year well below consensus, and said it would cut its global workforce 6%, to deal with what it describes as 'temporary slowdown and transition period.'
For the full year, the company sees revenue of $1.5 billion to $1.7 billion, and a net loss of 22 cents to 44 cents. That compares to consensus for $2.4 billion and 64 cents.
Fitbit's CEO was proud to say that Fitbit is the 'overall wearable category leader' while providing a dismal financial report and bad news for employees. They openly admitted that "… we have experienced softer-than-expected holiday demand for trackers in our most mature markets, especially during Black Friday …" The market has since calmed down a little, but still has the stock down 12% once the market opened.
Once again the a Volume King has embarrassingly fell to bad sales, less profits and less demand. But oh, they're the leaders in wearables. No, the leader is the one that makes the most money and that would be Apple. Once again empty statistics not backed by leading profits is in one word: USELESS.
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