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Fitbit: It All Hinges on the Watch, Says Raymond James

Raymond James analyst Tavis McCourt today opines that the forthcoming smartwatch from Fitbit (FIT) could go a long way to boost its profitability, or reduce it, depending on how it does.

Fitbit is widely expected to unveil in coming weeks a smartwatch that will be a more full-featured follow-on to the "Blaze" watch it unveiled last year.

McCourt, who has an Outperform rating on Fitbit, starts with the observation that the wearables market for wrist-worn devices is converging on gadgets with more and more functionality.

“Distinct categories of activity/fitness trackers, GPS fitness watches, and smartwatches, have started, and will continue, to merge,” he writes, "as all major vendors will be offering third-party app store downloads/native app processing by year end and functionality moves to lower price points."

Moreover, wrist-worn devices really are about displacing traditional watches, he writes. "Our view remains that over the next 10-15 years, every watch will be a smartwatch."

The smartwatch market is where smartphones were in 2009, he writes, "just recently allowing third-party app access to the platform” and "waiting for a 'killer app’."

McCourt offers that as older Fitbit products see sales decline, the rate at which the company...


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