Decline in second quarter smartwatch revenue
|Return on Equity (TTM)||-20.65%|
Fitbit share price vitals, Yahoo finance, 9 October 2019
Apple dominates smartwatch market
While there’s been no official announcement about who the potential buyer could be, there are rumours circulating that Alphabet [GOOGL] could be a contender with its new operating system Kai, as well as the new Soli chip that can track motion on a microscopic scale.
Not for Apple. The company has seen massive growth in its wearables business, which grew more than 50% in Q3 2019 and is now the size of a Fortune 200 company. But Apple acquiring Fitbit is not something Robert Lehar thinks is likely.
“Acquiring Fitbit for its trackers would be akin to buying Apple’s iPod business - a legacy business with no future,” Lehar writes on Seeking Alpha. “The smartwatch segment of the wearables market is then basically the Apple Watch market with others fighting over the less profitable or downright unprofitable lower-end of the market.”
“Acquiring Fitbit for its trackers would be akin to buying Apple’s iPod business - a legacy business with no future” - Robert Lehar on Seeking Alpha
Ultimately, Fitbit is a small company with a market cap of just $973m (as of 7 October) that has struggled to innovate its product cycles. Since floating on the New York Stock Exchange in June 2015, its stock has fallen more than 87% from its $20 offering price and currently trades around the $3.73 mark.
The stock has a consensus hold rating among 10 analysts on Reuters, with 22.97 million shares being shorted as of 13 September.
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