Fitbit files for $100 million IPO
Fitbit, the maker of a popular line of wearable fitness-tracking devices, has filed for an initial public offering worth up to $100 million.
Fitbit's watch-sized devices can track how many steps a wearer takes and estimate how many calories they are burning, how far they've traveled, and how long they've been active. More advanced devices also track sleep duration and quality, heart rate and running speed, and they can be synced up with smartphone apps.
The San Francisco company's basic Zip activity tracker costs $59.95, while its Surge "super watch" costs $249.95. Fitbit also makes a Wi-Fi-enabled scale that records data like body fat in addition to weight.
Fitbit says it has sold almost 21 million devices since 2011, but more than half of those sales were made in 2014. The company reported $745.4 million in revenue in 2014, almost triple its total a year earlier, and that pace has continued in 2015: In the first quarter Fitbit's revenue more than tripled to $336.8 million from $108.8 million a year ago.
The company reported a profit of $131.8 million in 2014 and $48 million in the first quarter of 2015. Fitbit Inc. intends to list its shares on the New York Stock Exchange under the ticker symbol "FIT."
Wearable technology hit a critical mass of mainstream attention this year with the launch of the Apple Watch and the burgeoning industry has investors and entrepreneurs paying close attention. Nearly every traditional technology company -- from Intel and Microsoft to Samsung and LG -- has a device for sale or a hand in the market, notes CBS News tech partner CNET.
"It really signals that the fitness tracker category has finally penetrated the mass market," Wes Henderek, an industry analyst with the NPD Group, told CNET. "It's no longer just a niche category and is appealing to a much wider range of consumers who are not fitness buffs." Henderek said that Fitbit, as the most dominant player in the category by a wide margin, is trying to nail its IPO timing to ensure it can grow even faster.
Though its growth is strong, Fitbit is facing a market full of big-name competitors.
"We expect competition in our market to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services," Fitbit wrote in a section of its filing labeled "risk factors."
Apple has marketed its Apple Watch as a comprehensive health and fitness device on top of its communication functions and other features ranging from music and Instagram to GPS and Twitter. It is priced substantially higher than Fitbit devices, with a starting price of $349.
Henderek says Fitbit is in a good position to fend off even companies like Apple. "Fitbit has tremendous brand equity," he told CNET, adding that Fitbit is one of the only wearable tech makers customers seek out by name rather than by the feature set of its products.
Smartwatches pose the biggest risk to Fitbit and other smart-wristband makers, industry analysts told CNET. Smart-wristband shipments are expected to fall by 15 percent to 17 million units, while smartwatches are expected to jump 17 percent to 21 million.
"Half the people who would have bought a [fitness] wristband will buy a smartwatch instead next year," Gartner analyst Angela McIntyre concluded in a November 2104 report.