Fitbit unveiled their new smart watch yesterday at CES and their stock fell 12.26% during mid day trading. Why did the folks at Fitbit feel that they needed to chase Apple in the smart watch category? The official release of the Apple Watch was on April 24, 2015. It’s been roughly 265 days between the lackluster release of the Apple Watch and Fitbit’s new smart watch, the Blaze. Wasn’t that enough time for someone in Fitbit’s senior management to say “Hey, we need to reconsider our smart watch, Apple didn’t really pull it off”?
Fitbit is a great company and they’ve been doing really well, so I’m surprised they decided to take this route (disclaimer, I don’t own stock in Fitbit). There are plenty of other directions Fitbit could have gone, as the health IT space has really been blowing up lately. Plus, the whole watch concept (beyond just the Apple Watch) has been an issue for a while. However, Fitbit was probably knee deep in development of the Blaze during this time and would have lost millions if they had changed direction on their product. So, the question becomes, when you’re a public company is it better to lose money on the back end (i.e. scrapped work costs, etc.) or the front end (i.e. shareholders, employees, etc.)?
Unfortunately for Fitbit this will sting for a while, but it’s a good lesson for companies similar to them who have recently gone public. Regardless of what the R&D or engineering teams think, your shareholders and the court of public opinion become very important drivers.