I have been saying for a while that the #fitbit CEO must wake in a cold sweat at 4am every day about his business.
Whilst they are kicking ass with market share today I see trouble ahead, it is after all only a #bluetooth connected #pedometer with some nice software. (I am an owner and I like it but it is what it is)
With a bill of materials and COGS of under $20 Fitbit has been making hay while the Sun shines selling at $70 (or $120 retail in Australia)
I have recently costed out a prototype with some common components so I know exactly what’s in one.
So to give you an idea of the component costs
- 3 axis #accelerometer (the main active component) >$1
- Processor + Bluetooth ($1-2)
- Battery <50c
- Assorted power chips/LEDs ~ $2
Obviously you have to assemble and fabricate and give the retailer a margin but I still think their gross margins must be healthy.