Fitbit Inc. is betting that lower prices will attract more customers to its wearables, including children as young as 6 years old.
The wearables pioneer on Wednesday announced two new additions to its device lineup, the Versa Lite and the kid-focused Ace 2, which represent cheaper versions of existing products. Fitbit FIT, +1.86% expects the new lineup — which phases out several older products — to hold more appeal with users who might have thus far avoided purchasing a wearable, especially younger and more price-conscious consumers.
”There’s definitely a segment of users we want to bring in at lower [prices],” Chief Executive James Park told MarketWatch.
The Versa Lite smartwatch comes in a more youthful assortment of colors, including a bright fuchsia and a bright blue, and it will sell for $159.95, $40 less than the traditional Versa product. The Lite model offers more than four days of battery life, activity and swim tracking, and heart-rate monitoring as does the existing Versa, but users of the cheaper model won’t get swim-lap tracking, stair-climbing statistics or the ability to store songs on the device. All those features come with the main Versa and Versa Special Edition products.
The company is also launching the Ace 2, an upgraded version of its kids’ device. The new model is $30 cheaper than the original Ace, at $69.95. It is swim-proof and features a case that has more of a “buffer” around the screens in case users fall or bump into things. The Ace 2 comes in “watermelon” and “night sky” color options, and it’s designed for kids 6 and older, while the original Ace was for ages 8 and up.
Fitbit said that the Ace tracker will be compatible with accessories from its Inspire line for adults, so that kids can keep the physical tracker but swap in a new band if they want a more mature look later on. This allows for “an easy progression for kids to graduate through the line of products,” according to Park, but it also helps Fitbit protect its margins: “Having a lot of interchangeable parts allows us to lower costs in manufacturing, kind of like how car companies have shared platforms.”
Fitbit also announced that the Inspire and Inspire HR trackers, which it had been quietly selling only through health plans, would now be available to consumers. All four of the new products are available for preorder starting today.
The company is trying to streamline the number of SKUs, or stock-keeping units, that it offers, which Park said will help boost sales because there will be less consumer confusion about which products to buy. To that end, Fitbit is retiring its Alta, Alta HR, and Flex 2 tracking bands, as well as its Zip clip-on, in favor of the Inspire and Inspire HR devices.
The Inspire line is relatively thin and was designed to look a bit like jewelry, according to Fitbit. Both Inspire devices offer sleep tracking, swim and activity tracking, and five days of battery life. The HR version has heart-rate tracking and designated modes for certain types of exercise, including biking and yoga. The Inspire will cost $69.95 and come in black and “sangria” palettes, while the Inspire HR will go for $99.95 and is offered in black, white and lilac. For comparison, the Alta and Alta HR devices that this line is replacing sold for $99.95 and $149.95, respectively.
“It isn’t solely our strategy to drive down [average selling prices] and increase active users, but it is a part,” Park said. Later in the year, Fitbit hopes to better monetize its active user base through a new premium subscription offering to be launched in the second half.
Management stressed active-user growth during Fitbit’s earnings call last Wednesday afternoon, but the stock posted its largest single-day drop since 2017 the following session amid concerns about health-tech progress and Fitbit’s earnings outlook. Fitbit shares have gained 15% over the past three months, while the S&P 500 SPX, -0.65% has gained 3.5%.
