Fitbit has launched a new subscription service as the company tries to diversify its revenue streams. A new device – the Fitbit Versa 2 – had been released by the company earlier in the year to a fair amount of fanfare.
Ten years after the release of its first device, the world is a vastly different place. The once iconic smartwatch is now facing competition from every corner of the industry and occupying a new niche might be the only way for the company’s continued survival.
The Hardware Bubble
The hardware Bubble that Fitbit has found itself a victim of is one that has been around for a while now. The company has solely relied on revenue from devices like the Fitbit Tracker, Fitbit Ultra and Fitbit One, granting guaranteed updates to any new purchase for about one year.
However, people tend to hold onto newer and higher quality devices for a longer time. Even as the company continues to make profits on older devices, the writing is surely on the wall for the company. After all, it’s not dissimilar from the predicament Apple is facing due to its reliance on raw hardware sales.
Fighting for Relevance
The once-profitable company has found themselves in the middle of a battle to remain both popular and relevant as their business model is attacked on all sides. On one end, Apple absolutely dominates the high-end smartwatch market, with few reputable competitors to its product.
And on the other side of things, companies like Huawei and Xiaomi are making it increasingly difficult for Fitbit to set themselves apart, often featuring the same features for a smaller price tag.
With all this going on, Fitbit may have found a way to leverage the fact that they are a market leader in the fitness segment.
Facing the same predicament as Apple, perhaps sometime in the near future, the company has taken an approach similar to the Capertunio company. The service costs $10 a month or $80 when paid annually.
Health has always been the focus of the Fitbit apps, and that continues to be seen with the new model the company seeks to adopt. Besides, subscription makes the world go round, so it shouldn’t be very surprising.
Premium members should expect to get either more metrics regarding their day-to-day activities or improved collection, e.g. Sleep Score. Premium content will include thousands of workout videos and audio produced by the company itself.
Fitbit Premium debuted in Australia and New Zealand for Android users, and will be rolled out to more countries in the coming months. Devices like the Apple Watch will be supported down the road.
Fitbit Premium also offers subscribers a chance for more exercise via content partners like Daily Burn, Headspace and Yoga Studio. The company has made it specifically clear that the premium option isn’t meant to replace any existing competition, just supplement it. Whether the company will enter the market with a splash remains to be seen.