However Apple might try to spin the numbers, focusing on profits and margins rather than actual sales, there’s no denying Fitbit continues to reign over the fledgling, slowly growing wearable market with an increasingly diverse portfolio of largely budget-conscious fitness products.
Unfortunately, the year-opening fiscal quarter was essentially as bittersweet for the San Francisco-based company as it was for Cupertino, with both unit shipments and total revenue on the rise, but net income in free fall and similarly harsh reactions from Wall Street to earnings calls.
Starting with the good news, Fitbit not only posted 50 percent higher quarterly proceeds than 12 months back, also surpassing analyst projections and its own February outlook at $505.4 million. 4.8 million “connected health and fitness devices” were sold between January and March 2016 worldwide, which represents a huge sequential decline, but a significant year-on-year progress from just 3.9 million copies in Q1 2015.
The recently released Blaze smartwatch and Alta smart band managed to account for a cool million shipments each, and a combined 47 percent of Q1 2016 revenue, prompting Fitbit to consider lowering “the time frame in which we release products.”
An “exciting” assortment of new intelligent timepieces and more rudimentary activity trackers is therefore in the pipeline already, though R&D and manufacturing costs will probably keep hurting the outfit’s bottom line.
Net income per share vexingly dropped from $0.22 to $0.05 between the beginning of 2015 and 2016, plummeting Fitbit’s stock price 11 percent in recent after-hours trading. For Q2, predictions circle a modest per-share profit of 8 to 11 cents on revenue in the $565 to $585 million range, contributing to full-year figures of roughly $1.20 and $2.5 billion.
Translation – Fitbit expects to sell a whole lot of wearables this year, but not to make a lot of money off them. Oh, well, you can’t have it all, at least not yet in such an unpredictable, uber-competitive segment of the tech world.