Fitbit has now decided to shift its focus. The company had failed to meet its target and financial goals for 2016. In order to achieve its goals, it has now decided to focus on the strategies in the services sector for healthcare and has come up with the idea of development of a smartwatch. This smartwatch will mark a departure for the San Francisco-based company, which had marked their start in the business by making the basic trackers for fitness that counted the number of steps.
The company had announced a revenue of 2.1 billion dollars for the year 2016, which was 1.9 billion dollar revenue in the year 2015. However, the saturation in the market started leading to a decline in the growth. Seeing the decrease in the demand, the company has expected the revenues in the year 2017 to go down by 20 percent to approximately 1.5 billion dollars from an initial 1.7 billion dollars. The analysts, however, had made the predictions of the revenue to go down by 2.4 billion dollars.
On Wednesday, a meeting had been called upon with the investors to discuss the earnings in the fourth quarter. James Park, the CEO of Fitbit confirmed that the company had not met with their financial goals for the year 2016 and to overcome this they will be investing capital in two main areas namely software that will help the user to keep tab with their fitness objectives and secondly a smartwatch. However, James Park did not give any information as to when the smartwatch will be launched. He also added that these steps will help the company to ignite its lost growth.
Fitbit had paid a sum of 23 million dollars in the last quarter of the year 2016 in order to acquire the assets of the smartwatch maker Redwood City Pebble. In addition to this, Fitbit also acquired the assets of Vector Watch, which is a European smartwatch maker for a sum of 15 million dollars. The company also bought Coin’s wearable payments technology.
Park said that these acquisitions have given the company a great foundation to make an extraordinary smartwatch that will perform operations more than the simple movement tracking and biometrics. He said the company will enable the smartwatch to deliver a more personal insight and motivate the consumers. He announced that Jeff Devine will be appointed as the new vice president.
Moreover, 6 percent of its total employees (that is approximately 107 people) will be laid off owing to the decline in the revenue for the year 2016. The executives of the company said that the sales of the company typically went down during the holidays and particularly on Black Friday.