Strong sales, but high abandonment for fitness trackers

NEW YORK -- Deepak Jayasimha's fitness tracker is now with 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 about a third of these trackers get abandoned after six months.

A health-care investment fund, Rock Health, says Fitbit's regulatory filings suggest only half of Fitbit's nearly 20 million registered users still were 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 whether 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 commonly are given as gifts. Fitbit gets the spotlight because it started trading publicly last month and has 76 percent of the U.S. market share by revenue, up from 64 percent a year earlier, according to the NPD Group.

Investors and analysts are bullish on Fitbit's prospects.

Its stock 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 Fitbits remain popular among employers and insurance companies looking for ways to keep people healthy. Fitbit is profitable, earning $132 million last year on revenue of $745 million.

Fitbit 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.

Fitbit had no immediate comment.