FitBit - Gettin', Havin', and Holdin’ Active Users

Much of the excitement and success around the IPO was fueled by the details that Fitbit shared about its operations ahead of the IPO. In a market where most players are either private or so large that their sports, fitness, and wellness operations are too small to present in quarterly results, Fitbit’s S-1 filing provided detail where little was previously publically available.

Financial metrics widely noted elsewhere but there was another key metric that received less attention. The number of active users among the Fitbit customer base has continued to grow.

Given as a percentage of total Fitbit devices shipped, Fitbit’s active user base grew to 88.6% by the end of 2014, up from 71.2% at the end of 2012. The company defines a paid active user as a registered Fitbit user who, within the three months prior to the period, has at minimum paired or has logged a reading into their Fitbit account. It should be note that Fitbit accounts can be used without Fitbit devices, either using smartphone sensors to collect mHealth data or through importing data from rival vendor devices; however, this is likely to be an option for only a minority of users and still speaks at least to the appeal of the company’s app.

This active user metric is key, not just for Fitbit but for the mHealth industry as a whole.

Perceived wisdom has suggested for a while that activity tracker devices lay unused after an initial six months use. We have noted before that while that may be the case for specific devices, it doesn’t reflect on the appeal of activity tracking itself fading. Instead, in line with many other consumer electronics markets, these devices are replaced with upgraded alternatives. When a company such as Fitbit can show that over its lifespan, active accounts continue to rise as a percentage of lifetime sales, it speaks not just to the longevity of the appeal of tracking but of the stickiness of a preferred vendor’s offering.

Fitbit has benefitted from ensuring that its devices support connectivity to a host of smartphone and other operating systems across a range of platforms. Now however, those key platform partners such as Apple, Google, and Samsung are increasingly moving into Fitbit's mHealth device and / or data collection market. Fitbits active user metrics suggest it has a keen ability to hold onto its user base. As mHealth data increasingly becomes the key value for end users, it will be important for all device players to maintain a strong relationship between devices and mHealth data if they want to not only get the device sales but to have those user remain active by holding onto those customers as devices are upgraded.