Fitbit Inc. (FIT) closed the day with 5.4% growth to $5.69 per share after the wearable company introduced global availability for its new product, Alta HR.
The company’s newest product, Alta HR, features new software to track users’ sleep quality, actionable guidance and coaching to improve the quality of your sleep and social features that let you update and receive feeds from friends and groups. The product is available today for $149.95 at major retailers across the globe.
Though Fitbit’s stock jumped following the news, it is unlikely the introduction of the new product is the reason for the market’s optimism. One of the reasons being that Alta HR was introduced three weeks ago. In the initial press release, the company said it was set to release in early April. The early availability may help Fitbit’s first quarter, but it’s far from turning the company around.
Fitbit had just posted a new 52-week low of $5.31 per share after closing at $5.40 on Friday.
In the company’s latest earnings report in February, CEO James Park said that 2017 would be a “transition year” and “we are making the right investments to support our vision and drive long-term success.”
Fitbit had also made a couple of adjustments to its management. It started with the hire of new executive vice president of operations, Jeff Devine, who has 25 years of operating experience with global technology brands including Cisco CSCO, Nokia NOK and Hewlett-Packard HPE. The company also promoted its VP of Engineering, Samir Kapoor, to Senior VP of Device Engineering.
In the midst of new hires and promotions, two executives will be departing by the end of March: Woody Scal, Chief Business Officer, and Tim Roberts, Executive VP, Interactive.
While the sudden surge is good for Fitbit, the road back to its formal glory of $18.85, its 52-week high will not be easy.
The problem with Fitbit is that it faces stiff competition at both the high and low-end products. It faces Apple’s AAPL Apple Watch at the high end and Jawbone and Garmin GRMN at the lower end. As smartphones start to incorporate advanced health-tracking features, users will have one less reason to buy single purpose wearable products like Fitbit.
Updating an existing product isn’t likely to save Fitbit, Alta HR will likely be popular, but it is not the only thing that will help turn the company’s sales slump around. Only time will tell if the transition in the leadership team and other investments will come together for Fitbit.
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