Strong Sales, but High Abandonment for Fitness Trackers

<div class="separator" style="clear: both; text-align: center;"> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEin3yazzIBF0BdMJ-UgKFs1oPIYYXHgznmzIS9Rzd5PN7VxFEw9JAaF-LMBuWQz8p2KASZEXKpUQ0UZF1dLKFCfowJInPvK0hCcKxpKcAngeVpbBy1JnVfP57sH6haFt1oCULrtet6M-T88/s1600/TECH.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEin3yazzIBF0BdMJ-UgKFs1oPIYYXHgznmzIS9Rzd5PN7VxFEw9JAaF-LMBuWQz8p2KASZEXKpUQ0UZF1dLKFCfowJInPvK0hCcKxpKcAngeVpbBy1JnVfP57sH6haFt1oCULrtet6M-T88/s400/TECH.jpg" width="400" /></a></div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> <br /></div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> <br /></div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Deepak Jayasimha's fitness tracker is now with his father-in-law in India, where it sits unused. Annabel Kelly foisted hers off on the kids. <a class="r_lapi" href="http://abcnews.go.com/topics/news/virginia.htm" style="-webkit-transition: 0.2s; color: #2e538f; font-weight: bold; margin: 0px; padding: 0px; text-decoration: none; transition: 0.2s;">Virginia</a>Atkinson took hers off to charge the battery and hasn't picked it up since February.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Although sales of Fitbit and other fitness trackers are strong, many of their owners lose enthusiasm for them once the novelty of knowing how many steps they've taken wears off. One research firm, Endeavour Partners, estimates that about a third of these trackers get abandoned after six months. A health care investment fund, Rock Health, says Fitbit's regulatory filings suggest that only half of Fitbit's nearly 20 million registered users were still active as of the first quarter of 2015.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> "The question for investors is how long the market will continue to grow at this rate, and whether Fitbit can execute on growing engagement before ... the number of devices sold per year reaches saturation," Malay Gandhi, a managing director at Rock Health, wrote on a blog.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Abandonment affects all manufacturers of fitness trackers, which are relatively cheap at about $100 and are commonly given as gifts. Fitbit gets the spotlight because it started trading publicly last month and has 76 percent of the U.S. market share by revenue, up from 64 percent a year earlier, according to the NPD Group.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Investors and analysts are bullish on Fitbit's prospects. Its stock value has more than doubled since the initial public offering. Analyst William Power at Baird Equity Research said Fitbit had room to grow worldwide, as only a quarter of its revenue came from outside the U.S. last year. Power also wrote that Fitbits remain popular among employers and insurance companies looking for ways to keep people healthy. Fitbit is also profitable, earning $132 million last year on revenue of $745 million.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> The company's market valuation of $8.6 billion is high compared with earnings so far, which could point to enormous growth potential — or simply overvaluation.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Fitbit now has competition from Apple Watch and other smartwatches that do what fitness trackers do and more, such as showing news updates and boarding passes for flights.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> In a statement, Fitbit said it intends to remain a market leader through new features and services to boost user engagement and revenue. The company said it keeps users motivated by offering ways to compete with friends and family and awarding virtual badges for hitting fitness milestones. Fitbit added that people who regularly use their devices make healthier choices.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> The statement didn't address Fitbit owners who've stopped using the device.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> If people aren't using their trackers, they won't recommend them to friends and family or upgrade when a new model comes out, said Dan Ledger, who tracks wearable devices at Endeavour Partners. They also won't pay for premium subscription packages, a potential growth area for Fitbit.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> Jayasimha, a New Yorker who walks three to four miles a day, said his Jawbone Up stopped giving him information he didn't already know. After it stopped working one day, he didn't bother getting it fixed for months. Even then, he never used it again. His wife used it for two weeks before sending it off overseas to her dad, who has yet to use it.</div> <div itemprop="articleBody" style="background-color: white; color: #333333; font-family: proxima-nova, arial, sans-serif; font-size: 15px; line-height: 17px; margin-bottom: 22px; padding: 0px;"> "I was just carrying through with the motion," Jayasimha said. "For someone who is not physically active, I think it will be useful. But once you get to a state where you are happy with the activities you do, it loses its efficacy."</div>

TECHNOLOGY Strong Sales, but High Abandonment for Fitness Trackers

Deepak Jayasimha's fitness tracker is now with his father-in-law in India, where it sits unused. Annabel Kelly foisted hers off o...

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