Fitbit has some challenges regarding future device sales. Will Apple see the same problem? Image source: Fitbit.

Fitbit filed an S-1 Registration Statement with the SEC earlier this month, and the document contains a lot of interesting details about the financials of the fitness tracker maker. Most interesting are the details the company provides about its users, which might give investors insight into how average people see wearable devices like Fitbit's.

Previously, we only had surveys and estimates to surmise how people use wearables. The S-1 statement provides some concrete details to analyze and that analysis might give us insight into how other wearable devices, most notably Apple's (NASDAQ:AAPL) recently released Apple Watch, will fare. Let's just say, if Apple Watch purchasers are anything like Fitbit purchasers, the device's sales might look more like the struggling iPad than the booming iPhone. However, Apple has some unique factors that could play in its favor when it comes to bucking the wearables trend we see in FitBit's numbers.

A look at Fitbit's users
In its S-1 filing, Fitbit reports a metric called Paid Active Users, which is really a misnomer because it includes "a registered Fitbit user who, within the three months prior to the date of measurement, has ... logged at least 100 steps with a health and fitness tracker or a weight measurement using an Aria scale." So really, PAUs are just active users from within the last three months. It also includes users subscribing to Fitbit's $50-per-year subscription service as well as anyone who's activated a new device in the last three months.

Fitbit also provides a metric called Registered Users, which simply measures the total number of users registered on its website -- not necessarily active users.

Using these two metrics coupled with the company's reported device sales, we can get a pretty good idea of repeat buyers and abandonment rates.

Period Ending

Cumulative Device Sales

Total Registered Users

Paid Active Users

Q4 2012

1.3 million

1.1 million


Q4 2013

5.8 million

4.5 million

2.6 million

Q4 2014

16.7 million

14.6 million

6.7 million

Q1 2015

20.5 million

19.0 million

9.5 million

Source: Fitbit S-1 filing.

With 20.5 million devices sold since the beginning of 2012 and 19 million registered users, only about 1 million or 2 million consumers seem to have purchased more than one Fitbit device in the last three years. And many of those might be Fitbit customers purchasing the connected Aria scale.

What's more, only about 50% of those users are actively using their Fitbit device. However, those who do use their Fitbit seem to stick with it, because that rate hasn't fallen over time.

Could the same thing happen to the Apple Watch?
While Fitbit's sales continue to grow impressively, the company's lack of repeat customers and high abandonment rate are two huge problems facing the company. Other wearable makers face the same problem. Research company Endeavour Partners found that one-third of American consumers who have owned a wearable device of any kind stopped using it within six months.

This indicates Apple is facing an uphill battle with the Apple Watch. Early signs indicate that it's off to a strong start, with demand outstripping supply and pushing shipments back into June, but Apple will have to persuade users to keep buying new devices on a consistent basis. The consistent and relatively short upgrade cycle for the iPhone has led to a rapid increase in sales. Meanwhile, questions about the length of the iPad upgrade cycle have left investors disappointed with shrinking device sales over the past year.

At first blush, the Apple Watch appears destined to be a device with sales that mimic the iPad more than the iPhone. However, there are several factors working in Apple's favor.

When it comes to reducing abandonment, the relatively high price of the Apple Watch will make it harder for users to ditch the device because of the psychological impact of wasting that money. More importantly, the significant user base will attract developers to the platform who will create apps that keep users attached to their Apple Watches.

Getting users to upgrade to a new device every two or three years may be challenging. The first iteration of the Apple Watch has room for improvement, though, and Apple is spending heavily on R&D to improve all of its products. Once manufacturing kinks are worked out and sales increase, Apple will have a significant amount of margin to play around with to add more functionality to the Watch. Improving functionality away from the iPhone and increasing battery life are two reasons users might upgrade to a newer device.

Still, none of these things are guaranteed to work out for Apple. Investors hoping that Apple Watch would become the next $100 billion product from the iMaker may want to reconsider that notion. It could happen, but it's much more prudent to take a conservative view of sales and repeat customers.