What happened 

Shares of fitness-tracking product company Fitbit, Inc. (NYSE:FIT) plunged 22% in 2017, according to data provided by S&P Global Market Intelligence, as financial results came in worse than expected. The company is having trouble gaining sustainable traction with consumers, and with new smartwatch rivals like Apple (NASDAQ:AAPL) and Samsung taking market share, the future looks pretty bleak. 

So what 

Fitbit got off on the wrong foot in January when management said fourth-quarter 2016 revenue would be $572 million to $580 million, well below previous guidance of $725 million to $750 million. 2017 hasn't been a lot better: The company expects fourth-quarter revenue of $570 million to $600 million, with the hope of breaking even on a non-GAAP basis. 

Fitbit Ionic watch with leather band.

Image source: Fitbit.

It's becoming increasingly difficult for Fitbit to compete against behemoths like Apple in today's consumer device market. A perfect example is the new Ionic watch: It was priced at $299.95 until recent discounts, but didn't come with nearly the same feature set as Apple's $329 Apple Watch Series 3. 

Now what 

Operationally, Fitbit is weak, and getting weaker, and strategically it's in terrible shape. It doesn't have a platform to build on like Apple or Samsung, it doesn't have the scale of either of those companies to lower costs, and it doesn't have the sales and marketing reach to sell products as efficiently. It's hard to see how Fitbit will survive without a new partnership or buyout in the next few years, especially if Apple continues to expand its share of the smartwatch market. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.