Wearables maker Fitbit buys smartwatch startup for fraction of reported value in 2015
Smartwatch maker Pebble has sold to Fitbit in a deal that leaves it shutting down all manufacturing, refunding Kickstarter backers, and warning current owners that their watches may stop working at some point in the future.
The deal, according to a report from Bloomberg, values the smartwatch startup at less than $40m. If true, that is a massive drop from earlier reported acquisition attempts. Techcruch says Pebble was first offered $740m by watchmaker Citizen in 2015, and then $70m by Intel in early 2016. Pebbles chief executive, Eric Migicovsky, reportedly refused both offers.
After the purchase, Fitbit will incorporate Pebbles software engineering team into its own company, but the majority of Pebbles employees, including Migicovsky, have not been offered jobs by the new owner.
In a statement, Fitbit co-founder and chief executive James Park said Fitbit sees an opportunity to build on our strengths and extend our leadership position in the wearables category.
With this acquisition, were well positioned to accelerate the expansion of our platform and ecosystem to make Fitbit a vital part of daily life for a wider set of consumers.
Pebbles own statement was less upbeat. The company said that it is no longer promoting, manufacturing, or selling any devices, and that while Pebble devices will continue to work as normal Pebble functionality or service quality may be reduced in the future.
Pebble had gained a reputation for swimming against the tide of the wider smartwatch industry, eschewing powerful devices and high-resolution screens for simpler watches with e-ink screens and a focus on long battery life.
But that wasnt enough to help the company make its mark on the wider market, and Pebble was hurt further by the consolidation of the smartwatch market around platforms with strong links to pre-existing smartphone operating systems, such as Android Wear and the Apple Watch.
Other smartwatch and wearable manufacturers have found themselves in similar straits. Microsofts Band, a hybrid fitness tracker and smartwatch, was discontinued in October this year, while Fitbit itself has struggled to break into the market with its Blaze smartwatch. The company cut its Christmas sales forecast in early November this year.
The acquisition comes less than six months after Pebble ended its last Kickstarter campaign, raising $12m to produce and sell three new devices: the Pebble 2, Pebble Time 2, and Pebble Core. The company had become a recurring feature on the crowdfounding site, using it to sell pre-orders and tighten links with customers long after similar businesses would have moved to a more conventional shop.
Now, Pebble is refunding backers who havent received their watches, which includes everyone who tried to buy a Time 2 or Core, and says they will receive a full refund by 16 December.
Its a bittersweet time, no doubt, Pebble said in a message to backers. Well miss what were leaving behind, but are excited for what the future holds. It will be important for Pebblers to extend a warm welcome to Fitbit as fans and customers sharing what they love about Pebble and what theyd like to see next.
Pebble backers were, by and large, less hopeful. Comments included one user saying it was the Last time ever I will use Kickstarter and will advise everyone I know to avoid! and another noting that My Round should have shipped in September, but it didnt. When I asked for an update I was told delays. Now I know that was a bit of a fallacy and it was never going to be produced, and you want to possibly not even refund the monetary value you got from me.
Read more: www.theguardian.com