The company announced Wednesday that “effectively all trackers and smartwatches” starting in January “will not be of Chinese origin” as a result of US tariffs.
Fitbit appears to be one of the first major tech companies to publicly announce it is shifting fully away from China, which has long been a hub for Silicon Valley giants thanks to the country’s abundance of skilled low-wage workers and robust technology infrastructure.
In the first half of 2019, Fitbit introduced several strategic measures to boost its financial health, including lowering the cost of some devices to appeal to new customers and offering premium digital services, such as help improving sleep, to capitalize on users who don’t replace their devices frequently. But such measures hinge on maintaining strong margins on the devices Fitbit does sell, something tariff charges could compromise.
Fitbit CEO Ron Kisling said in a statement Wednesday the company began seeking alternatives to manufacturing in China in 2018, as the threat of the trade war loomed.
“As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway,” Kisling said.
The company said it would offer further details on the change and its financial implications when it reports third-quarter earnings, expected later this month.