Have Fitbit and GoPro Peaked?
The stories of GoPro and Fitbit over the past few years are so similar that it’s almost scary—but not as scary as what each of the major tech brands have actually gone through during that time.
Since their foundings in 2002 (GoPro) and 2007 (Fitbit), both brands have established themselves as the leader in their categories. They’re essentially the Band-Aids—or iPads, to bring it back to consumer tech—of the action camera and fitness wearables markets, respectively. However, since going public and experiencing instant market growth, both have been on a serious slide.
After peaking at just shy of $87-per-share three months post-IPO, GoPro has seen its stock price drop a staggering 89 percent to roughly $9.70 per share.
Life hasn’t been much easier in the Fitbit camp, either. A month after going public, the company peaked at $47.60 a share. Since then, it’s been a steady decline to just under $8 per share.
It’s not just stock prices that are falling for both companies though. Revenue, demand, and shipments have all slowed significantly over the past year or two. GoPro’s revenue has fallen 40 percent to $240.6 million, down from $400.3 million a year ago; Fitbit, on the other hand, continued to lower revenue expectations heading into the final quarter of the year.
Compounding matters for both companies, the headlines surrounding them haven’t been anything to be proud of. GoPro has struggled through the failure of its Hero4 camera, a 7 percent reduction in staff size, a massive recall of its Karma drone, the subsequent laying off of 200 employees from its drone division, and another 15 percent workforce cut and company restructuring.
Then there’s Fitbit, who stumbled out of the gates last year with its Fitbit Blaze smartwatch, which was aimed right at the Apple Watch but failed to come close to doing any damage in the marketplace; there was the rumored offer to buy the company early last month, which they denied; the weak earnings reports; there’ve been a number of uninspiring product launches over the course of the last year; and now they’re buying smartwatch maker Pebble, which appears to be a move made out of desperation, for some $30-40 million.
But why have the wheels apparently come off the rails with both of these companies?
The answer to that question boils down to a couple of different things. First: complacency. Both of these companies hit home runs early on in, and they almost became complacent. They expected to continue to dominate the market just because of who they were. While their names still do carry a lot of weight, it’s almost becoming dead weight. Consumers are fickle and very much exist with a what-have-you-done-for-me-lately kind of mindset, which leads me to point two: uninspiring products. GoPro and Fitbit have attempted to expand their reach and update their product portfolios with new and interesting gadgets, but they’re completely missing the mark. I get why GoPro attempted to get into the drone market—people (and they) were creating rigs to make their cameras fly—but it’s been a total disaster. Fitbit hasn’t necessarily missed the mark as bad with their product launches over the past year, but they’ve been nothing short of bland. The result is both companies reporting weak sales expectations heading into the most important quarter of the year.
It’s not just uninspiring product, though. Demand is waning for fitness wearables and action cameras. A Gartner Inc. survey over the summer found that 30 percent of people in the U.S., U.K., and Australia who ever wore a fitness tracker no longer use the device. Action cameras aren’t in such dire straits, but they haven’t managed to live up to expectations and remain a niche-market product.
Another problem both GoPro and Fitbit are facing is total market saturation. Both companies hit a nerve in their respective markets, and that’s led to a ton of competitors cropping up, creating similar products with much-lower price points. All of that has slowly eaten away at each company’s control of the market and they just haven’t been able to recapture it.
Back to the question at the top, though: Have GoPro and Fitbit peaked? I don’t think we’ll ever see either company reclaim their sheer dominance over their respective markets. So, the short answer there is no. That stated, they both can recapture a bit of the old magic by simply getting back to what made them great companies to begin with. They ought to focus on their core markets, their missions as consumer tech manufacturers, and strive to create products that fulfill those missions and give the consumer what it is they’re looking for. They can’t be everything to everyone. And that’s where a lot of tech companies have failed over the years.
GoPro and Fitbit have stumbled, but they have an opportunity to pick themselves up and get right back into the game.