FITBIT OBSERVATIONS

  1. Last year Fitbit CFO said they have north of 80% of market share. That's not a good thing so early in product and customer lifecycle.
  2. After dismal first quarter their CEO reiterated guidance for the full year. As it turns out it is not going to be the case even with the busiest Holidays quarter.
  3. Their year over year same quarter sales increased 21% from 11% increase in units and 11% increase in average selling price. Just 11% increase in units says the ceiling is near and dropping.
  4. They highlight average selling price increase of 11% from last year but fail to note drop of 7% from last quarter. This should be a huge concern because they just introduced higher priced device.
  5. Fitbit likes to say Apple is not their completion, that is not true. If customer won't buy your product if they bought Apple Watch then it is your competition.
  6. Finally if Apple is not your competition you should worry because Apple only plays in really large markets, skimming the top 3% with premium products at higher margins.