Fitbit (FIT - Free Report) is firing on all cylinders to fight off competition in the wearable world on the back of its robust technologies and innovative products.
Recently, the activity tracker and fitness device maker released the fitness-focused cheapest smartwatch, Versa Lite, which will help users track their health like the earlier released Versa.
Priced competitively at $160, the device can track workouts and heart rate just like Versa but cannot store music directly on the watch.
In addition, the company announced new versions of its cheaper trackers, including the Fitbit HR, capable of tracking heart rate, and Ace 2, which can track activity in children.
The low pricing will help Fitbit better compete against players like Apple and Samsung, as well as expand its share in the growing wearables market.
As many other players are still entering into this smartwatch category, pricing definitely remains an important factor. The competitive pricing of the new smartwatch should definitely help the company increase its traction in the growing wearables market.
Notably, Fitbit’s growth has been hindered by rising competition from major tech companies like Apple (AAPL - Free Report) , Garmin (GRMN - Free Report) , Alphabet’s (GOOGL - Free Report) Google and Xiaomi. Consequently, Versa Lite, which is certainly appealing, will likely help the company to fend off competition to some extent.
It remains optimistic about its enhanced product offerings and expects the newly-launched smartwatch to further aid demand.
Improving Competitive Position
The fitness tracker space is currently experiencing growing proliferation of wearables globally, due to comfort and ease that these products provide in tracking fitness.
According to IDC, the worldwide market for wearable devices grew 31.4% during fourth-quarter 2018, reaching a new high of 59.3 million units. The market growth was driven by the launch of new wearables during the holiday season as well as new smartphone launches from leading brands. In particular, smartwatches grew 55.2% year over year and accounted for 34.3% of the overall market during the quarter.
Given immense growth opportunities, tech giants like Apple, Samsung, Garmin and Google are making strong efforts to strengthen their market position.
Reportedly, smartwatches now comprise 44% of Fitbit’s business and the release of Versa last March helped Fitbit grow smartwatch business significantly on a year-over-year basis.
Notably, its continuous efforts toward enhancing product offerings will help it in gaining further momentum in the market.
Solid Product Portfolio: A Key Growth Driver
Fitbit continues to expand its portfolio with product launches, which will bode well for the company in the near term.
Last October, the company announced the availability of its latest wearable called Charge 3, which is equipped with a swim-proof design, a larger touchscreen display and an extended battery life of up to seven days.
The company partnered with Humana in order to help people improve health culture and prevent chronic diseases. With rising concerns surrounding healthcare and fitness, as well as increasing chronic diseases, such partnerships and product launches will help fortify Fitbit’s competitive position, and expand the customer base.
Currently, Fitbit has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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