Dive Brief:
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Fitbit is developing a watch with a focus on health and will continue looking for opportunities to expand in the healthcare market, the wearable fitness device maker said in its 2016 Q4 earnings report.
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The company's revenue dropped 19.3% in 2016 from the previous year, and the wearable technology developer plans to cut jobs with a gloomy outlook for 2017.
- The struggles seem to stem from a decline in sales, which fell from 8.2 million in the fourth quarter of 2015 to 6.5 million in the fourth quarter of 2016, Lauren Gensler reported for Forbes.
Dive Insight:
The wearable device market is undergoing a transformation, according to an ICD report. IDC had expected smartwatches to outgrow basic wearables. While that has not been the case, growth in the wearables market has somewhat stagnated since 2015. Earlier this month, Fitbit attributed revenue losses in 2016 to a softer than anticipated holiday demand for trackers and announced plans to layoff approximately 6% of its global workforce (110 employees) to create "a more focused and efficient operating model." And Jawbone said it is leaving the consumer wearables market and begin offering clinical products and services to healthcare providers.
Fitbit controls 23% of the wearable device market, leading all other wearable device developers. However, some of its competitors have enjoyed more financial success. For instance, Garmin recently released a strong earnings report and its sales are on the rise. But Fitbit has continued a deeper integration with healthcare through partnerships with UnitedHealth and Medtronic. It also recently acquired smartwatch developers Pebble and Vector Watch.
The jury is still out on wearable technology for clinical services. Patients seem enthusiastic about the devices and more than three-quarters of participants in a recent survey said they were most interested in using wearable technology to track exercise and medical information. Another two-thirds said they would use the devices to share medical information with providers. On the other hand, many patients are wary of using devices to share information with providers and many use their devices infrequently.