The Securities and Exchange Commission revealed that FitBit, the company that makes the wearable fitness trackers, has made significant amounts of money in sales over the past year. FitBit has filed for an IPO, which is an initial public offering, and the company said sales have been doubling for each year for the past three years.
In 2014, FitBit sold 11 million devices, which equals out to about $745 million in revenue. Since 2008, FitBit has sold over 21 million devices, and the company is trying to get into the health and fitness products market, which is a $200 billion market. The health and fitness market includes fitness programs, dietary supplements, and gym memberships, so FitBit is looking to take advantage of the huge customer base this sector has. If you have never heard of FitBit, it is a wristband that helps track your physical activity, and then uses computer apps to help provide you with feedback about your health and fitness.
Since the whole premise of FitBit is to help you get fit, the company wants to become the leader of the “get fit” programs that are offered at various companies to get employees into better shape. Usually these types of programs are done through health insurance and life insurance, and FitBit is expecting that sector to grow from $7.4 billion to $10.4 billion over the next three years. FitBit has already started getting into that sector of the market by partnering up with John Hancock, which is a life insurance that a lot of companies offer. The partnership started last month and John Hancock will provide customers of theirs who wear the FitBit with life insurance discounts, which is an incentive for people to begin getting healthy. The healthier the life insurance customer is, the bigger discount they can get on their life insurance premiums, so it can really save both the customer and the employer a lot of money every year.
FitBit has already grown to produce seven different wearable devices, which are on sale at over 45,000 retail stores, and the devices are now available in over 50 countries. This is all part of a growing trend and obsession of people who are into “wearables” as it’s called, which are devices that cling to your body for a specific reason or benefit. Apple, Google, and Motorola are also in the “wearables” market with smartwatches, which is the next big wearable item coming up. Microsoft, Samsung, and Oculus VR are also getting into the “wearables” business by creating virtual reality headsets, so the market is trending towards the wearable product lines, which are creating a buzz with both the younger generations and the older generations.
In terms of FitBit, the biggest question for the company is how to get people to keep using their products, since a lot of consumers say they buy the product but after a while, they just throw it in the drawer and stop using it. FitBit not only needs to get people to buy their products, but also continue to use the products over a long period of time, which means the company needs to really help people in terms of their health. If FitBit can give consumers good health information that can be translated into action, such as how the person can get their health better, then the company will have long-term customers. You will be able to find FitBit on the New York Stock Exchange under “FIT” so that is how the company will be traded now that it filed for an IPO.