Fitbit CEO James Park said during the company's first-quarter earnings call today that it is planning on introducing "exciting new products" heading into the holiday season this year, though Park didn't specify exactly what those Fitbit products will be.
It's not a huge surprise, since trademark filings released last week suggested that Fitbit might be looking to add to its current product lineup. But it also shows that Fitbit might be feeling the pressures of increasingly compressed product cycles, as it looks to keep customers engaged and also appease investors.
It was a better-than-expected quarter for Fitbit: the company beat revenue expectations, with $505.4 million in revenue for the first quarter (which was also a 50 percent year-over-year increase). It also sold 4.8 million devices. To date, Fitbit says it has sold 43 million wearable devices.
Fitbit's new products, Blaze and Alta, accounted for 47 percent of this quarter's revenue
But 47 percent of the quarter's revenues came from sales of the new Fitbit Blaze fitness watch and Fitbit Alta activity tracker — which is noteworthy when you consider that both of those products were shipping for about a month in the quarter. (They're also more expensive than some of the other Fitbit trackers.) Around 40 percent of Blaze and Alta users were people who had upgraded from early Fitbit devices.
"The fact that we introduced the new Blaze and Alta in the last month of the quarter and they drove almost 50 percent of our revenue is pretty remarkable," Fitbit chief financial officer Bill Zerella noted on the earnings call. "It demonstrates how important it is for us to bring new products to market on a regular basis."
Park underscored this point, saying later on during the earnings call that the company wants to "lower the time frame in which we release products."
So, we know what investors want. Do customers really need more Fitbit right now? The short answer is probably no. Currently Fitbit sells the Zip, One, Flex, Charge, Charge HR, Alta, Blaze, and Surge wearable devices, ranging in price from $60 to $250. The majority of these are wrist wearables. There are some differentiators — this one has a color display, this one has heart-rate tracking, this one has built-in GPS — but they are all variations of a similar thing. Park credits much of Fitbit's success to this broad lineup, saying "each product addresses a specific need." But more of the same thing would mean a very bloated product lineup, or could create a paradox of choice for consumers.
But maybe Fitbit has some actual differentiators up its sleeve — things like headphones, or a stylish analog watch that tracks steps, or some type of medical device. Maybe it will pare down its current product lineup and update some of the existing devices with more reliable, advanced technology. Maybe it will figure out a magic way, beyond social networks, to keep consumers engaged for longer periods of time.
Oh, and despite its first quarter earnings, Fitbit gave a weaker-than-expected guidance for the second quarter. Wall Street didn't seem to like what it heard: Fitbit's stock dropped 11 percent in after-hours trading. Fitbit's Park also announced that Hans Hartmann, the company's chief operating officer who joined Fitbit in 2011, is leaving to become COO of Facebook-owned Oculus.