If at first you don't succeed, release a product better-suited for mainstream consumers.
That seems to have worked for Fitbit (FIT) in recent months, as the company has just announced that Versa unit sales have topped 1 million. Versa was introduced earlier this year as Fitbit's "mass-appeal" smartwatch, priced at $200 and sporting a more approachable design (which just so happens to resemble its biggest competitor). The product became broadly available in mid-April, meaning Fitbit has been able to move 1 million units in just under two months.
Versa's relative success helps compensate for Ionic's underwhelming performance.
Image source: Fitbit.
Versa is a hit
In no uncertain terms, growing unit sales is of critical importance to Fitbit right now. As the wearables market continues transitioning away from basic trackers toward full-featured smartwatches, Fitbit has seen unit sales slow, as well as its position in the wearables market shrink. The company has ambitious goals to grow a subscription-based digital health service, but those efforts remain inchoate at the moment.
After enjoying a seasonal bump during the fourth quarter, unit volumes plunged a gut-wrenching 60% on a sequential basis in the first quarter to just 2.2 million.
Data source: SEC filings. Chart by author.
In other words, Versa is already starting to help prop up unit volumes. Fitbit notes that Versa is now the fastest-selling product in its history. Over the span of two months, the device has singlehandedly sold nearly half of all unit volumes from all products shipped in the first quarter, all during a seasonally more difficult quarter. Generally speaking, the second quarter is not known for being a blockbuster one for consumer electronics. That's what makes Versa's performance thus far all the more impressive.
"With Fitbit Versa, we are delivering on our promise to offer a true mass appeal smartwatch with engaging new features. The positive response to Versa shows that we are filling this void and well positions us to gain share of the fast-growing smartwatch market," CEO James Park said in a statement.
The long game
Slowly but surely, Fitbit is also making progress on the platform front, which is arguably more important than how any single model performs, as the platform is what ultimately underpins the products. The company now has over 18,000 developers and 900 third-party apps and clock faces in Fitbit OS, according to Fitbit.
The company will undoubtedly seek to build on Versa's momentum with other products in the pipeline, many of which will leverage the nascent Fitbit OS platform. Hopefully, Fitbit learned its lesson with the Ionic, which was far too niche of a product.
