3 Reasons To Avoid the Fitbit IPO

Last Thursday, fitness band producer Fitbit filed for a $100 million IPO backed by some apparently “pretty impressive” numbers.  Q1 sales were up 144% YOY, company revenue in 2015 is at pace to surpass $1 billion, and Fitbit customers have increased by a factor about about fifteen since 2012.  Also, they have an awesome marketing department as evidenced by the imbedded Whoa Fit video.  Conversely, despite its success some remain unconvinced when it comes to Fitbit’s longterm development prospects.  Perhaps predictably, many point to another Silicon Valley tech company’s latest release the iWatch as the wearable fitness tracker’s primary competitor.

There are undoubtedly many other obstructions Fitbit will face as times goes on.  For example, Fitbit’s product line suits a narrow fitness tracking market (rather than sports performance), market saturation and further development of similar products, as well as market cannibalization by technologically superior and more user-friendly smart watches.  However, of the many voices speaking apprehensively about Fitbit’s post-IPO prospects, one is sorely missing.  Fitbit owners themselves.

I have a Fitbit Charge HR. I am wearing it now. When I double tap, it tells me my heart rate is 54bmp.  That’s likely because in the four months I’ve had it, I’ve increased my fitness significantly.  I can also get feedback about how many steps I’ve taken, calories burned, distance traveled, and time.  You can wear it when you sleep to get very basic sleep metrics.  It also bluetooth’s into my phone so I can see who is calling me without grabbing my phone.  I can’t answer the call with the Fitbit though.

Despite these modest positives, my personal experience with Fitbit has been less than ideal. 

First, there’s a significant discrepancy in the result I get from tracking my run with Fitbit versus a GPS-based program.  I’ve seen differences of 1km between the two, and I’m more inclined to believe in GPS rather than a wrist pedometer like Fitbit.  Maybe I have a stride length shorter than whatever Fitbit deduces is average.  This makes me skeptical about other Fitbit statistical feedback.

Second, Fitbit is pretty low quality.  I brushed mine against something within the first two weeks of use and now have a nice scratch across the screen.  For the $150 I paid for it, I would expect a bit higher quality a product or at least some basic considerations about screen protection.  Especially because others do.

Third, overall the quality of the product is insignificant to what is available in smart watches.  The display of not only my mid range Fitbit but also the $249 upgrade the Surge is reminiscent of original Nintendo.  Where the plastic of the wrist band meets the actual Fitbit brain is also a bit abrasive and of low craftsmanship.  And while resilient itself, the band doesn’t quite seem to justify $150 let alone $249.  If it was on the market four months ago, I would have bought the iWatch because Apple’s reputation for producing quality products. 

This little black band on my wrist may be partly responsible for my elevated and increasing level of fitness.  It might have given me a bit of a push to get outside and compete with my mom on steps. Probably more important was my own awareness of health and fitness.  And though I don’t have the cadillac Surge model, the same three problems above apply to it as well. 

Market talk and statistics aside, my own experience with its products leads me to believe Fitbit has bigger problems to consider.  A complete overhaul and improvement of its product line to transition it from a cheap tracker wearing the clothes of an expensive gadget to a viable, desirable, and enduring fitness accessory – in my humble opinion – will be a key determinate of the company’s future prospects of success.