FIT - Fitbit Gives Away Devices to Drive Service Revenue Growth
Fitness tracker and smartwatch company Fitbit (NYSE: FIT) makes most of its money from selling devices, and that's unlikely to change anytime soon. But the company is working to grow its services business. Fitbit Health Solutions, which includes services like coaching as well as solutions for employers, health plans, and other organizations, is expected to generate around $100 million of revenue this year.
The services business will get a boost over the next year from a deal with the government of Singapore announced Wednesday morning. In the company's first major integration with a national health program, Fitbit will provide free devices for those willing to commit to a year of the company's premium service.
This deal is expected to account for more than 5% of health solutions revenue, according to a Fitbit spokesperson. Speaking to CNBC, Fitbit CEO James Park noted that the company beat out other bidders, including smartwatch leader Apple.