MarketWatch First Take: Fitbit and GoPro woes show hardware is still a risky investment

The recent struggles of Fitbit Inc. and GoPro Inc. show that stand-alone, niche hardware companies will invariably struggle, a lesson investors should remember next time Silicon Valley pops out a young device maker.

Fitbit FIT, -15.95%which had warned in November of lower sales this holiday season, told investors Monday that sales were even worse than they had expected, with an estimated fourth quarter revenue shortfall from $153 million to $170 million. The company also said it would lay off about 110 employees, sending its shares lower than $6 for the first time.

Fitbit’s misfortunes echo similar problems seen by action-camera maker GoPro GPRO, +7.25% which has also announced layoffs and a restructuring, closing its entertainment division.

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