In a bid to bolster its presence in the smartwatch market Fitbit, Inc. (FIT - Free Report) launched a modern fitness tracking device — Fitbit Versa. The product is already out for presale at $199.95 and will be available at stores from April 2018.
Fitbit Versa — a light metal smartwatch — provides a personalized dashboard to users. It entitles users to have an easy access to their daily and weekly fitness data. The product boasts advanced fitness and smart phone features like 24/7 heart rate tracking, onscreen workouts and automatic sleep stages, quick replies on Android, on-device music and wallet-free payments on Fitbit Versa Special Edition.
Fitbit already enjoys a first mover advantage in the world of wearable fitness trackers and we believe that its customer base will strengthen with the introduction of Versa.
With the rising concerns regarding healthcare and fitness and the growing demand for smartwatches, Fitbit, instead of concentrating only on fitness wearables, has shifted focus on diversification of product portfolio.
Reportedly, people are opting for pricier smartwatches that are equipped with fitness and health tracker instead of wearables which track only fitness.
Previously the company used to manufacture smartwatches without fitness trackers. In a bid to address the evolving demand for fitness trackers in smartwatches, Fitbit launched Ionic last fall.
Fitbit also unveiled Fitbit Ace, a wristband for kids aged eight or above — the company’s first fitness wearable for kids.
The company is also rolling out a health tracking feature to help track menstrual cycles. The feature will be available on both Ionic and Versa.
According to MarketsandMarkets report, the global wearable fitness technology market is expected to reach $12.44 billion by 2022 at a CAGR of 13.7% between 2016 and 2017. Fitbit wants to capitalize on this and remain on a growth trajectory.
Improving Competitive Position
With Versa, the company’s competitive position is likely to strengthen against other players in the fitness wearable market like Apple (AAPL - Free Report) Apple, Samsung Electronics, Xiaomi and Garmin (GRMN - Free Report) .
Notably, in the last quarter, Fitbit’s growth was hampered due to the growing popularity of smartwatches in the fitness wearable category and influx of new wearables. The company faced a stiff competitive pressure from Apple’s Apple Watch which is a smartwatch combined with fitness tracking feature.
Fitbit Versa is more akin to Apple Watch 3 and Samsung Gear Sport. Unlike Ionic, it possesses all the necessary applications and flaunts an attractive design.
Thus, the new product is likely to boost the company’s sales and help it counter competition against Apple Watch 3, courtesy of its customer friendly price and needful features. The starting price of Apple Watch 3 is $329 while that of Fitbit Versa is $199.95.
Zacks Rank & Stock to Consider
Currently, Fitbit carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider inTEST Corporation (INTT - Free Report) . inTest carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for inTest is currently pegged at 10%.
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