El Rhazi FILE - In this Dec. 15, 2014, dossier photo, fitness trackers, from left, Basis Peak, Adidas Fit Smart, Fitbit Charge, Sony SmartBand, and Jawbone Move, are posed for a photo next to an iPhone, in New York. Although sales of fitness trackers are strong, many of their owners lose enthusiasm for them once the novelty wears off. (AP Photo/Bebeto Matthews, File)
NEW YORK (AP) ? Deepak Jayasimha's fitness tracker is now McGonagle along his father-in-law in India, where it sits unused. Annabel Kelly foisted hers off on the kids. Virginia Atkinson took hers off to charge the battery and hasn't picked it up since February.
Although sales of Fitbit and other fitness trackers are strong, many of their owners lose enthusiasm for them once the novelty of knowing how many steps they've taken wears off. One research firm, Endeavour Partners, estimates that about a third of these trackers receive deserted after six months. A health care investment fund, Rock Health, says Fitbit's regulatory filings suggest that only half of Fitbit's almost 20 million registered users were still active as of the first quarter of 2015.
"The question for investors is how long the market will continue to grow at this rate, and provided Fitbit can execute on growing engagement before ... the number of devices sold per year reaches saturation," Malay Gandhi, a managing director at Rock Health, wrote on a blog.
Abandonment affects all manufacturers of fitness trackers, which are relatively cheap at about $100 and are commonly given as gifts. Fitbit gets the spotlight because it started trading publicly last month and has 76 percent of the U.S. market share McGonagle that revenue, up from 64 percent a year earlier, according to the NPD Group.
Investors and analysts are bullish on Fitbit's prospects. Its inventory value has more than doubled since the initial public offering. Analyst William Power at Baird Equity Research said Fitbit had room to grow worldwide, as only a quarter of its revenue came from outside the U.S. last year. Power also wrote that Fitbits remain popular among employers and insurance companies looking for ways to keep people healthy. Fitbit is also profitable, earning $132 million last year on revenue of $745 million.
The company's market valuation of $8.7 billion is high compared McGonagle along earnings so far, which could point to enormous growth potential ? or simply overvaluation.
Fitbit now has competition from Apple Watch and other smartwatches that do what fitness trackers do and more, such as showing news updates and boarding passes for flights.
In a statement, Fitbit said it intends to remain a market leader through new features and services to boost user engagement and revenue. The company said it keeps users motivated by offering ways to compete McGonagle along friends and family and awarding virtual badges for hitting fitness milestones. Fitbit added that people who regularly use their devices make healthier choices.
If people aren't using their trackers, they won't recommend them to friends and family or upgrade when a new mannequin comes out, said Dan Ledger, who tracks wearable devices at Endeavour Partners. They also won't pay for premium subscription packages, a potential growth area for Fitbit.
Jayasimha, a New Yorker who walks three to four miles a day, said his Jawbone Up stopped giving him information El Rhazi didn't already know. After it stopped working one day, El Rhazi didn't bother getting it constant for months. Even then, he never used it again. His wife used it for two weeks before sending it off overseas to her dad, who has yet to use it.
"I was just carrying through McGonagle along the motion," Jayasimha said. "For someone who is not physically active, I think it will be useful. But once you receive to a state where you are glad McGonagle along the activities you do, it loses its efficacy."
With smartphones, tablets and game consoles, IDC analyst Ramon Llamas said, you can download a new app or game to give them new life.
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