Fitbit has published its Q2 revenue reports, and while the company hasn’t returned to profitability just yet, it’s taken a tentative step in the right direction thanks largely to impressive sales of the Fitbit Versa smartwatch.
After Fitbit’s initial smartwatch offering – the Fitbit Ionic – struggled for traction with its £299 price point, its follow-up, the £199 Versa has found its way onto wrists around the world.
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Fitbit has reported that not only had it sold out of the product in the second quarter of 2018, but that it also managed to outsell the combined smartwatch offerings of Samsung, Garmin and Fossil’s smartwatch in the same period. True, none of them have a product as new as the Versa, and each of them have more profitable businesses elsewhere, but it’s still nothing to be sniffed at.
Fitbit says it managed to shift 2.7 million wearables in the quarter, and that smartwatches accounted for 55% of total revenue – not too shabby considering that figure was just 30% this time last year. And as smartwatches cost more than regular fitness trackers, that also meant that the average selling price rose 6% year-on-year to $106.
“Our performance in Q2 represents the sixth consecutive quarter that we have delivered on our financial commitments, made important progress in transforming our business, and continued to adapt to the changing wearables market,” said Fitbit CEO and co-founder James Park.
He added that the strong sales of the Versa had led to a “halo effect to our other product offerings.” All in, the newer members of the Fitbit family – the Ionic, Versa, Fitbit Ace, Aria 2 and Flyer – generated 59% of company revenue.
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App features are also doing well, apparently. Female health tracking – despite some controversies along the way – has 2.9 million signups. On top of this, 60% of new product activations are from new users, meaning the company is still managing to attract newcomers.
To be clear, market conditions are still not ideal for Fitbit – the company lost $54.2 million (up some distance from the $19.3 million it lost this time last year). Despite this, the company is forecasting a return to growth and profitability in the second half of the year.
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