Fitbit CEO James Park announced a new strategy for the company in which it will target two areas: consumer health as well as fitness and enterprise health.
Fitbit's new strategy will include an increased presence in the smartwatch market and more corporate partnerships, specifically those in the healthcare industry. (Photo courtesy Fitbit.)
After failing to meet its 2016 revenue projections, Fitbit Inc., San Francisco, has announced a series of executive-level personnel changes and a new business strategy to focus on consumer and corporate wellness.
Moving forward, Fitbit will target two primary areas: consumer health and fitness and enterprise health, according to Fitbit CEO James Park quoted in company statement issued Monday. Consumer health includes “new markets such as the smartwatch category and offering premium software and services that provide more personalized insights and guidance,” the statement said. Enterprise Health includes corporate partnerships, specifically those in the healthcare industry.
“2017 is a transition year and while we continue to lead the connected health and fitness market, we must take important steps to chart our return to profitability and growth,” Park said in the statement. “It is essential that we are organized properly so that we can successfully execute our strategy. My confidence in our future is as strong as ever and I believe the steps we are taking will contribute to our long-term success.”
Vice President of Engineering Samir Kapoor has been promoted to senior vice president of device engineering. Kapoor’s main goal will be accelerating the company’s product development process, while overseeing hardware integration and research initiatives. He will report to company co-founder Eric Friedman.
Current Chief Business Officer Woody Scal and Executive Vice President Tim Roberts will leave the company by the end of March.
After originally forecasting as much as $750 million in 2016 fourth quarter revenue, Fitbit reported $574 million for the period. This underperformance has already prompted an internal reorganization initiative that cut more than 100 jobs from Fitbit’s global workforce.
Financial analysts at L&F Capital Management said the recent success of Fitbit competitors, such as Garmin, has negatively affected the Fitbit's sales.
“Overall, what was a not-so-competitive marketplace is turning into a hyper-competitive marketplace, and Fitbit's and Garmin's recent results and fiscal 2017 guidance speak profoundly to this dynamic,” the analysts said in a Feb. 23 Seeking Alpha article.