Image source: Fitbit.
The follow-up to one of Fitbit's (FIT +0.00%) most successful products is here. The leading maker of wearable fitness products announced retail availability of Charge 2 yesterday. Fitbit's Flex 2 hit the market earlier this month, and while it generated a fair amount of buzz as the company's first swim-proof tracker, this is the one that will likely dictate how well Fitbit fares during the critical holiday shopping season.
There's a lot riding on Charge 2, and not just because the $149.95 wrist hugger is priced 50% higher than Flex 2. Charge HR -- the product that yesterday's debutante is replacing -- is Fitbit's best selling fitness bracelet.
Charge 2 incorporates a larger display, Fitbit's proprietary PurePulse heart rate tracking, and new health, fitness, and notification tools. New releases carry a lot of weight at Fitbit. The Blaze smartwatch and Alta tracker that it rolled out earlier this year have accounted for roughly half of its sales through the first half of 2016. The one-two punch of Flex 2 and Charge 2 have to be workhorses for the wearable tech giant as we head into the meaty holiday quarter.
Tracking the trackers
Citi's Stanley Kovler issued an upbeat analyst note last week, and one of the reasons for his cheery outlook was an uptick in download activity for the official Fitbit app. With two-thirds of the second quarter's Blaze and Alta purchases going to first-time customers, a good way to gauge a new product's success is to see how the app is faring. New buyers tend to download the app for the complete Fitbit experience.
Kovler leaned on app marketplace watcher App Annie, and the findings are notable. The app has consistently been the top download under the U.S. Health and Fitness category across all platforms, but this month finds the application cracking the list of the 100 hottest downloads for Apple's (AAPL +0.00%) iconic App Store. Investors will want to keep an eye on how it fares on that front in the coming weeks.
It has surprisingly not cracked the Top 100 for Android devices following the Flex 2 launch. With Apple rolling out the Apple Watch Series 2 this month one would think that iPhone owners would gravitate to the pricier smartwatch that offers some health and fitness features. However, the counterargument to that is that iPhone customers tend to be slightly more affluent than Android owners, making them more likely to own fitness-tracking bracelets. The Apple Watch penetration rate for iPhone owners still remains low.
The next few weeks will be critical. Early reviews for Flex 2 have been generally positive, and now we'll see what the first wave of Charge 2 recipients think. Fitbit doesn't need both new devices to be hits, but with the holidays around the corner and replaceable accessory bands being introduced next month -- giving Fitbit owners some customizable fashion choices -- it needs at least one of this month's debutantes to score big.
