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Why Wall Street Is Excited About Fitbit’s Ionic Smartwatch

August 29, 2017, 5:54 PM UTC

Fitbit unveiled its new smartwatch, dubbed the Ionic, on Monday and got at least some investors excited. The company’s beaten down shares have gained almost 5% since the announcement.

Some analysts on Wall Street see the $300 watch as a solid product that will help Fitbit find growth again after a disastrous 2016. In addition to all the usual fitness tracking features in prior Fitbit devices, Ionic is waterproof and has its own GPS sensors, along with a special chip to make mobile payments and bright color screen that can be easily read outdoors.

Jim Duffy at Stifel Nicholas says he was reassured that the Ionic will be available in stores in October, in plenty of time for the holiday shopping season, after some news articles surfaced about rumored delays over the summer. The $300 price should also boost the average selling price, or ASP, of Fitbit’s overall line, which currently ranges from $60 Zip pocketable tracker to the $200 Blaze semi-smart watch.

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“We are pleased to see the Fitbit Ionic smartwatch release on schedule for October,” Duffy writes in a report on the Ionic. “The $299.95 price tag is competitive with other offerings and we believe the extended battery life and fitness focus to be positive differentiators.”

“Overall, with established shelf space with retailers and a higher ASP offering, we believe the introduction is supportive of Fitbit’s vision to transition to more full-featured offering,” he adds.

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For Oppenheimer analyst Andrew Uerkwitz, new products released on Monday including the the Ionic and a set of wireless headphones called the Flyer look impressive but would have helped the company compete with Apple (AAPL) and others much more if they had come out sooner. The new products and broader software offerings that go along with them will make Fitbit less dependent on sales of fitness trackers, which have been sinking of late, he says.

“We see the company doubling down on fitness and moving well beyond basic activity trackers,” Uerkwitz writes. “We applaud these moves and see them as something that is probably a year or two late. If these launches are successful, we believe the shares could re-rate much higher—not only on a sign of better execution, but as a connected health company being more valuable than a fitness tracker hardware company.”

But William Power at Robert W. Baird & Co. says the new devices weren’t enough to convince him that Fitbit’s (FIT) stock would recover much (its share price is down 60% over the past year).

“The device, with an attractive price point, could generate solid sales, though it will also be launching at the same time as Apple’s rumored next watch, which will likely also add new capabilities,” Power writes. “Coupled with continued slower lower-priced activity tracker sales, we are maintaining our Neutral rating.”