CES 2016: Fitbit smartwatch panics investors – here’s why

fitbit blaze

Fitbit Blaze smartwatch

Fitbit’s a market leader in wearable tech via its fitness tracking bands so its entry into the growing smartwatch sector should mean good news, right? Wrong! The company’s shares actually fell as much as a massive 18% yesterday after the company announced its first full-colour smartwatch.

So what was that all about? Investors obviously panicked that it won’t be able to compete against all the other devices out there – from giant tech specialists like Apple and Samsung to watchmakers like Tag Heuer and Fossil – and decided, essentially, that Fitbit needs to know its place!

The big gamble

Fitbit is among a huge number of companies unveiling smartwatches at CES this week with Huawei, Misfit, Fossil and Withings all betting on smartwatches growing into a much bigger category, and especially betting on a bigger take-up among women.

So, what of Fitbit’s new watch? The Blaze smartwatch launches in March and is very focused on style as well as tech. Priced from $199, it features a colour touchscreen, continuous heart-rate monitoring and call/text alerts from a paired smartphone. There are multiple options for easily swapping the strap and display and the company’s Tory Burch partnership will kick in here with new designs from the high-end label.

So far, so good. But is there any justification for that massive share price fall?

On the downside, we all know that smartwatches still have a big job to do when it comes to convincing the mass of consumers globally about their very existence. Meanwhile, the Consumer Technology Association said this week that fitness trackers sales should rise only 12% (by volume) this year, so Fitbit’s fast growth could be crimped.

But looking more optimistically, Fitbit already has a host of devoted customers (especially women) who might be prepared to upgrade to its watch as it comes from a ‘trusted’ brand. Additionally, its device isn’t overloaded with apps – Fitbit says that the main functions people use on their smartwatches are time, notifications, health and fitness. And that’s what it’s providing here. So perhaps this launch really does make sense.

Only time will tell…

fitbit

Fitbit

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