Fitbit (FIT) Declines as Best Buy Set to Begin Selling Apple Watch; Still 'Very Different Products', Notes Analyst

Fitbit (NYSE: FIT) declined Monday on news Best Buy (NYSE: BBY) will be the first national retailer, other than Apple Stores, where customers can buy the Apple Watch (Nasdaq: AAPL). Sales begin August 7th.

Analyst Charles Anderson of Dougherty noted Best Buy was Fitbit's largest retail customer in 2014, comprising 12% of sales. He also noted that only 100 of Best Buy's 1,050 stores and BestBuy.com will begins stocking the Apple Watch, with 200 stores planned by the end of the year.

"As we noted in our initiation last month, we believe it is too early to render an accurate judgment about whether the Apple Watch is causing consumers to defer purchases of a Fitbit or decide against one. Part of that has had to do with the fact that the Apple Watch has been difficult to purchase and has had minimal distribution. For comparison's sake, Fitbits are sold at over 45,000 retail locations globally vs. 680 for the Apple Watch," said Anderson.

"To the extent the Apple Watch is available at more retailers, clearly we believe the number of "gift buyers" of the product will increase. We could see some consumers weighing the purchase of a Fitbit Surge ($250) vs. an entry-level Apple Watch: Sport Edition ($350) at retail," continued the analyst. "But to be clear, there is still wide discrepancy in price of Fitbit products ($60-$250) vs. Apple Watch products ($350-$17K). Additionally, as users of an Apple Watch, we can say it generally does a poor job of Fitbit-like functions (activity monitoring, sleep tracking) due to battery life limitations. At this point, they are very different products."

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