Fitbit Buys Digital-Wallet Technology
May 18 2016 - 12:00PM
Dow Jones News
Apple Inc. stepped into wearable fitness device maker Fitbit
Inc.'s wheelhouse when it introduced the Apple Watch a year ago.
Now Fitbit is returning the favor, making a bet on mobile-payments
technology that could look a lot like Apple Pay.
Fitbit said Wednesday that it purchased the wearable-payments
assets of Coin, a consumer electronics company, with plans to
develop a payment solution that could be embedded into future
Fitbit devices. Terms of the deal weren't provided.
Since Apple launched its smartwatch, Fitbit has rolled out new
products, notably the Blaze and Alta models, that are more advanced
than its early fitness trackers. At $200, the Blaze is priced below
the $299 entry price for the Apple Watch.
Fitbit's Blaze device has several features in common with the
Apple Watch: Users can see text notifications and calendar alerts,
and the device can be used to control music.
But Fitbit's Blaze lacks a digital wallet service. With Apple
Watch, and other Apple products such as the iPhone, shoppers using
Apple Pay wave the device in front of a wireless reader to complete
their purchases.
Fitbit said the Coin transaction was completed May 12. It said
it wouldn't integrate the technology into this year's devices, but
wireless payment could be on its products in the future.
Fitbit, one of the IPO darlings of last year, has seen its stock
tumble on concerns over the company's long-term business outlook
amid growing competition. New products account for the bulk of
sales, which puts pressure on Fitbit to spend to keep up with
technical advances and shifting consumer tastes. Revenue more than
doubled in 2015 compared with 2014, but the company has spent
heavily to drive sales growth and future product launches.
Fitbit is looking to keep its position as the market leader in
wearable devices. It was the No. 1 seller of wearables in the first
quarter of 2016, with about 25% of market share, according to data
from International Data Corp. Apple held the third-largest chunk of
the market, behind Chinese electronics company Xiaomi Corp. Fitbit
shipped 4.8 million units in the quarter compared with Apple's 1.5
million. Xiaomi shipped 3.7 million.
Separately, Fitbit also said Wednesday that it would sell its
Fitbit Blaze and Fitbit Alta devices in China.
"We are focused on making wearable devices that motivate people
to reach their health and fitness goals and that also make their
lives easier with the smart features they need most," said James
Park, Fitbit's chief executive and co-founder. Mr. Park added that
Coin's technology "will further our strategy of making Fitbit
products an indispensable part of people's lives."
Fitbit said this month that first-quarter sales climbed 50%,
showing that less-expensive fitness trackers still have legs as
they compete with the Apple Watch. But amid the higher spending,
the company's gross margin declined to 46.3% from 50.2%. Mr. Park
has said the company hopes to accelerate product development and
decrease the amount of time it takes to launch products.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 18, 2016 12:45 ET (16:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2024 to Oct 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Oct 2023 to Oct 2024