Fitbit sells millions of devices a year — but it’ll have to keep customers actually using its product if it wants to edge out the competition.
A model displays a Fitbit Flex and a smartphone on May 7, 2013.
Yoshikazu Tsuno / Getty Images
In its 200-page IPO filing Thursday, Fitbit confirmed its leading edge in the fitness-tracker industry: It sold nearly 11 million devices and generated $745.4 million in revenue last year alone.
But as Fitbit seeks to defend its market share against competitors, including the Apple Watch, another important factor is how successfully it can convince users to keep using their devices, and perhaps to pay for new features and services. Those internal figures have now been disclosed for the first time.
Somewhat famously, people tend to lose or grow bored with fitness wearables in general. According to a 2013 survey, one-third of users stopped using theirs within six months.
Fitbit said in its S-1 filing it had about 9.5 million "paid active users" as of April 1. (For context, since 2007 the company has sold almost 21 million devices, including wristbands and wireless Aria scales.) But the somewhat complicated definition of "paid active users" makes it hard to discern just how "active" these users are.
Fitbit's definition encompasses people who, within the three months prior to March 31, had an active subscription to Fitbit Premium or the newly acquired FitStar; synced a tracker or scale to a Fitbit account; weighed themselves on a Fitbit scale; or walked at least 100 steps with a tracker. (Users with many devices linked to a Fitbit account were counted only once.) But Fitbits are intended to be a constant part of users' lives, and tracking 100 steps — about 1/20th of a mile — on a Fitbit over the course of three months doesn't necessarily translate into long-term consistent use.
The Fitbit Zips at the Mobile World Congress in Barcelona, on Feb. 24, 2014.
Josep Lago / Getty Images
A better, though incomplete, sense of Fitbit's user engagement comes from a startup called Evidation Health. Its platform, AchieveMint, invites people to sync more than 100 fitness apps and devices and rewards them for healthy activities with points that can be converted into cash or merchandise.
"Fitbit users are actually really highly engaged," said Luca Foschini, Evidation's head of data science, citing data from 20,000 Fitbit users since mid-2010.
For BuzzFeed News, Foschini crunched numbers on people Fitbit would consider paid active users. Half of them logged an activity on about 70 of the prior 90 days, he said.
Another way to measure retention is the number of people who leave. Of all Fitbit users, 5 percent stop using their device within a week of buying it, and 12.5 percent stop within a month, Foschini said.
Fitbit executives "actually have a case that the people that buy a Fitbit tend to stick to it, tend to use it," Foschini said.
A Fitbit spokeswoman to declined to comment.
This isn't a comprehensive picture of all Fitbit users worldwide. AchieveMint's users, by nature of joining the service, tend to be more motivated to work out, Evidation's executives said.
But these figures do provide a glimpse into Fitibit's status as it tries to fend off many competitors in the wireless health and fitness device industry, like Garmin, Jawbone, Misfit, Google, LG, Microsoft, and Samsung. In its S-1 filing, it specifically called out the Apple Watch as a potential threat, and it remains to be seen whether the watch's fitness-tracking sensors will replace consumers' desire for a Fitbit.
"I think the vast majority of users we see in our platform aren't probably shelling out $350 for an Apple Watch," compared to $60 for a Fitbit Zip, said Christine Lemke, chief product officer of Evidation. "The price point is going to keep it from being a serious threat to Fitbit in the near term."
In the end, the winner will not only sell the most devices; it will persuade the largest number of people to keep coming back.
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