After a couple challenging years, Fitbit (NYSE:FIT) has started to mount a turnaround. The company has already returned to profitability. In no uncertain terms, the Versa is driving that progress, positioned as a mainstream smartwatch that can appeal to average consumers. Versa's predecessor, the Iconic, in contrast, was a flop because it was priced too high and targeted a smaller niche of performance users.

Fitbit is now looking to build on that momentum.

Collection of Versa Lite models and accessories

The new Versa Lite. Image source: Fitbit.

Adding to the family

The company announced four new additions to its wearables lineup yesterday: the Inspire, Inspire HR, Ace 2, and Versa Lite.

The Inspire ($70) and Inspire HR ($100) are basic fitness trackers (the HR version includes heart rate tracking) and will replace a handful of older models (the Alta, Alta HR, Zip, One, and Flex 2). Fitbit had actually introduced the Inspire a month ago, but it was only available to enterprise users participating in corporate wellness programs. The company is now bringing it to the consumer market.

The Ace 2 ($70) is a refreshed version of the Ace, a fitness tracker for kids, that was launched a year ago. Fitbit will launch the Ace 2 this summer.

In most parts of the world, the wearables market is rapidly transitioning away from basic trackers toward full-featured smartwatches, and streamlining the lineup should yield various operational efficiencies and cost savings. Basic trackers are still popular in emerging markets, so Fitbit still wants to address that demand with refreshed products.

The real headliner

The Versa Lite is easily the most important new addition to the portfolio, as Fitbit is getting more aggressive on pricing. The Versa Lite will start at $160 -- significantly cheaper than any smartwatch Apple (NASDAQ:AAPL) sells. A previous-generation Apple Watch Series 3 starts at $279, while the latest Series 4 starts at $399.

Fitbit now has three different versions of the Versa: Versa Lite ($160), Versa ($200), and Versa Special Edition ($230). The Versa Lite includes most of the core features that users expect from a smartwatch, only lacking the ability to track floors climbed, swim laps, music playback, and on-screen workouts. The higher-end Versa Special Edition's main differentiation is mobile payments.

Fitbit is the No. 2 smartwatch player behind Apple, and the company's mainstream devices have emerged as compelling alternatives for more budget-conscious consumers. The company was the No. 4 vendor in the broader wearables market in the fourth quarter, according to recent estimates from IDC.

Apple has created a price umbrella in the smartwatch market, and Fitbit is happy to take shelter beneath it, expanding its market share in the process.