The smartwatch battle recently began with the respective brand launches from Samsung, Apple (AAPL) and Fitbit (FIT). I chronicled the launch of these individual devices in an article titled Fitbit, Apple And Samsung Go Head-To-Head-To-Head With Smartwatches. In this article, I aim to deliver my thoughts with regards to how the Fitbit Ionic has been received by consumers, initially.
What I fear occurs with such new and heralded product launches that serve to build investor sentiment is that inexperienced writers and bloggers create a false narrative or one that doesn’t appreciate all the variables at play. A clear case of this can be found in an article written recently by Jeffrey Himelson and published on SeekingAlpha.com. The article is titled Fitbit’s Ionic Smartwatch Sales Appear Strong. On the surface it would appear, to novice investors and those not familiar with retail product launches, that sales are robust for the Fitbit Ionic smartwatch. However innocuous the verbiage appears it is anything but. Within Jeffrey’s article, he utilizes e-commerce in-stock levels to surmise a sales conclusion. This is a very dangerous and rudimentary way to go about achieving true sales sentiment.
Firstly and most importantly, Fitbit only announced that it’s Fitbit Ionic smartwatch would be available in select regions and through select retail outlets starting on October 1, 2017. Secondly, this does not dictate that all regions and all retail outlets will have the product available on day 1 for the product launch. In fact, if we take for example Target (TGT) and Best Buy (BBBY) in the United States, to-date, not all stores within the respective chains have received their slated product. So when Jeffrey offers the following pictures denoting wide scale out-of-stocks less than 2 weeks since the product launch date it is not only dubious, but without recognition of inventory levels for participating stores.
After three years of struggling to grow sales without any success and finding Macy’s in its least enviable position within the retail space, one would think the obvious, many of these Macy’s (M) locations simply haven’t received their slate of Ionic inventory yet. Now had it just been Macy’s that Jeffrey was announcing to have “sold out” of product, in less than 2 weeks, I wouldn’t be so skeptical as an investor. But Jeffrey takes this “sold-out” or out-of-stock sales indicator across Target (TGT), REI, Best Buy (BBBY) and Verizon (V). Of course, most of the touted out-of-stock or sold out stores Jeffrey indicated now miraculously have stock shy of the orange Ionic model and for well understood reasons. And yes, this inventory update also includes Fitbit.com, Fitbit’s very own direct to consumer website as shown below.
