Sluggish Fitbit Ionic Sales Put Company’s Future At Risk

The new Fitbit Ionic smartwatch, the latest iteration in the fitness technology company’s arsenal of wearable fitness trackers, has not delivered the business-saving boost Fitbit hoped it would.

According to a Friday (Dec. 15) report by Fortune, Wall Street analysts are reporting the company’s newest wearable option is not turning out to be as popular as anticipated. The lukewarm response could be attributed to its $300 price tag, as well as the similar alternatives many competitors are offering in the space.

Fitbit has pursued partnering with corporates for wellness plans and with medical centers for research studies, but neither have paid off as expected.

“Exiting 2017, innovation has failed to both unlock any meaningful healthcare business opportunities and inspire meaningful new consumer interest in the category,” said Jim Duffy, analyst at brokerage and investment banking firm Stifel, Nicolaus & Co. “While monetization avenues in the digital health space remain conceptually intriguing, realization of the opportunity has been underwhelming to date, and there is nothing tangible to point to return on the associated R&D investment spending.”

Duffy cut his rating for Fitbit’s stock to “sell,” prompting a 9 percent dip in the share price. The stock is down 15 percent this year, losing 69 percent since the company went public in 2015. It was trading at $6.20 on Friday.

The wearable tech provider’s rise to glory ceased last year when the fitness wearables market became saturated with competition. Its revenue declined 35 percent in the first nine months of 2017, resulting in a net loss of $232 million, compared to a 2016 net income of $43 million.

Fitbit’s Ionic features mobile payments, five-day battery life and third-party app downloads. Despite its design, intended to compete with the likes of Garmin and Apple – particularly for its long battery life, which exceeds Apple devices — the device simply isn’t selling.

“Continued inventory build for the Ionic leaves us more cautious on Q1,” Morgan Stanley analysts warned in a report on Thursday. “Store checks show a continued build-up in Ionic inventories since Black Friday, even as sell-through reached holiday peaks.”