The STAT Health tech summit is scheduled for next week ( September 9/10). One of the interesting sessions focused around opportunities in remote health monitoring will feature conversations with James Park, CEO, President, and co-founder of Fitbit.
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Fitbit’s remote health discussion at the STAT summit
The session provides guidance around how Fitbit pursues evolving remote health monitoring opportunities.
It is no surprise that Fitbit has been focusing on the platform experience side of things along with new device capabilities with new developments around its Fitbit subscription features.
Fitbit’s recent 10-Q sheds some light on some of the challenges as well as the opportunities faced by the company.
It is becoming abundantly clear that the company is dramatically losing revenue streams in the Asia Pacific due to challenges from local players such as Huawei, Xiaomi and others.
Sales in the US have also slowed during the pandemic. For the six months ending July 4th, 2020, the number of devices sold has fallen by 28% when compared with the same time in prior year. The decline in US sales is ~16% whereas international sales have seen drops of ~28%.
Although new product introductions in 2020 have been way behind compared with 2019, as well as compared with other competitors, the company has made significant product improvements with the release of its Fitbit Sense product.
The company has been able to actively shape up its high margin lines of business during the last quarter. Fitbit has been able to create more content for Fitbit Premium, the paid subscription service offering personalized health insights, guidance, advanced sleep tools, customized programs, mindfulness content, and over 200 workouts from various brands.
To help support users during the COVID-19 pandemic, in the first quarter of 2020, Fitbit announced a 90-day free trial for new Fitbit Premium users.
Revenues from the subscription service have been largely immaterial in the first half of 2020 but could evolve as more Fitbit users signup for the subscription in the future and more users sign up for upgrades after the free-trial expiration.
One bright spot that has evolved for Fitbit is centered on Fitbit Health systems.
This platform delivers health and wellness solutions for employers, health plans, and health systems. Revenue from the Fitbit Health Solutions channel was approximately 10% of total revenue in the first half of 2020. This suggests that efforts to position Fitbit devices and software platforms on health-centric use cases are gaining traction.
Both Fitbit subscription and Fitbit health solutions are high margin business for the company.
It’s important to hear James Park’s perspective on where he thinks Fitbit is headed when it comes to remote health monitoring opportunities. We believe if Fitbit is able to uniquely position itself in the remote health monitoring arena, we could see a dramatic uptick in its Fitbit Health systems business lines in the coming quarters.
Since Garmin and other smartwatch players (except for Apple) have been largely absent from this line of business, Fitbit has an opportunity to position itself as a serious contender under the leadership of James Park in the emerging space of remote health solutions via wearables.
