The once hugely popular manufacturer of activity trackers, based in San Francisco, California, became a publicly trade company on June, 18, 2015, when its shares were first floated at the price of $20.
The move had been in the making for a while, Fitbit having revealed back in May that it had issued a request to be listed at the New York Stock Exchange (NYSE).
From the very beginning, experts considered this a rather risky decision, given the fact that Apple had just released its latest smartwatch, also offering users the ability to monitor health and fitness.
However, at the time, James Park, Fitbit’s chief executive officer, dismissed the fears as unfounded, since Apple’s newest gadget came with a much higher price tag, and therefore it was believed that the rival wearables could coexist peacefully, being targeted at different income categories.
Such line of reasoning appeared accurate during the winter holidays: on Christmas day, Fitbit’s mobile app was ranked the highest in terms of total number of downloads, at iTunes’ App Store.
This suggested that a large number of people had been presented with a Fitbit fitness tracker as a Christmas gift, and that the wearables had remained in huge demand.
Unfortunately, this wave of optimism was short-lived, since Fitbit began having trouble right from the first days of 2016.
A group of customers launched a class action lawsuit against the manufacturer, accusing it of misleading advertising. More precisely, citing testimonies made by medical practitioners and other experts, they claimed that Fitbit’s Surge and Charge HR were extremely inaccurate in monitoring heart rate, although this had been the devices’ initial selling point.
Apparently, PurePulse technology, hailed by marketing campaigns as highly reliable and precise when tracking pulse, was actually perilously faulty, with heart rates being severely underestimated, especially during intense physical exercise.
Claimants revealed that on average, the readings were off by around 25 beats, although in some cases the difference between the wearer’s real pulse and the one displayed on the trackers was of a staggering 75 beats.
Aside from this health scandal, Fitbit also had to face criticism regarding its upcoming Blaze smartwatch, whose launch has been scheduled for March.
The device, priced at $199, is seen by many as a poor man’s Apple Watch, especially since it only supports software provided by Fitbit, instead of being open to third-party apps as well, like its rival is.
Blaze offers its prospective buyers plenty of features, such as the possibility to monitor sleep, pulse, exercise (number of steps, miles etc.).
It also includes GPS, text & call alerts, as well as event reminders, but unlike its $350 counterpart it doesn’t give its wearer the ability to write emails or messages, or to listen to music via headphones while working out.
Although the jury’s still out regarding how Blaze will actually fare once it’s released, all these apprehensions regarding the new gadget, coupled with the Pure Pulse scandal have been more detrimental than expected to Fitbit.
Share prices have reached $18.50 on Monday, January 11, after plummeting by around 13%. The decline started on January 5, when stock experienced an 18% drop, and ever since that day things have gone from worse to worst for the tech business, the total downturn amounting to 37%.
Even so, financial analysts are still confident that Fitbit will manage to survive this sticky patch, and eventually rebound. The question is if the lowest point has already been reached, or if even poorer results are to be expected in the following period, before the company’s predicted resurgence.
Image Source: Flickr