What's going on?

Remember that Fitbit you got your mom for Christmas? Well, she�s probably not wearing it anymore � and she�s definitely not buying another one!

What does this mean?

Fitbit, the maker of fitness trackers, saw its stock tank 30% on Wednesday after the company said its profit and revenue will be far lower this year than previously expected. The seriously underwhelming prediction comes just ahead of the crucial holiday shopping season. Last year, Fitbit was a holiday darling: it had one of the most downloaded apps on the App Store over Christmas, sending its stock marching higher. Unfortunately for Fitbit, it looks unlikely to repeat its holiday performance this year.

Why should I care?

The bigger picture: Fads fade. Gadgets get commoditized.
It turns out that counting one�s steps is about as boring as it sounds. How about filming yourself while surfing? Pretty cool if you�re a world-class surfer; less cool if you find stand-up-paddle-boarding a challenge. Both GoPro and Fitbit are suffering as the novelty factor of their products wear off. Added to their woes is the fact that it�s not very difficult for other companies to make similar products � and so competition has further stunted their sales growth.


For the stock: It�s still breathing.
The good news is that Fitbit is still a profitable company, and it has potential avenues for future growth, like embedding itself into the healthcare ecosystem (think: health insurance that�s linked to physical activity). The usefulness of (and revenue from) such services would likely last longer than your 10,000-step new year resolution. The stock might be worth 80% less than it was a little over a year ago, but don�t count Fitbit out just yet.