I love rooting for the underdog. That’s probably why I like Pebble so much…even though I’ve never owned one before. But now, it looks like the company’s underdog story is coming to an end.
After a rough patch, the e-paper smartwatch company looks poised to be bought and absorbed by fitness wearable giant Fitbit.
Pebble was one of those rare Kickstarter success stories, gaining worldwide recognition for their quirky and innovative smartwatches. However, it looks like all that Kickstarter success was not enough to keep the company afloat. TechCruch reports that in March, Pebble laid off 25% of its staff and had to turn to debt funding and loans (raising USD28 million in debt and venture financing) to keep the lights on. The company also saw their shares plummet from a peak of USD49 a pop to USD8 per share according to AndroidPolice.
Now, a report from The Information suggests that the smart fitness giant Fitbit is set to purchase Pebble in a deal that sees Fitbit acquiring Pebble’s assets which include intellectual property and software. Reports also suggest that the company intends to phase out the entire Pebble brand altogether.
Another piece of interesting news is that TechCrunch’s source says that the deal could be valued between USD34 million to USD40 million — which is peanuts and would barely allow Pebble to cover their debts. This is a stark contrast to what watch maker Citizen’s USD740 million offer to buy Pebble back in 2015.
But what could this move mean for Fitbit and their wearable devices?
Well, we’ve been racking our brains here but we can’t seem to understand this move beyond Fitbit wanting to kill off some competition and acquire patents.
As far as software goes, Fitbit and Pebble operate on vastly different platforms so if Fitbit was looking to combine the two OSes, it could prove to be a challenging task. And if they wanted to bank on Pebble’s loyal following, I doubt Pebble fans would be happy if Fitbit phased the brand out.
In any case, Fitbit must have some kind of plan in in their minds because even the fitness tracker maker is in some pretty dire straits. In 2015, Fitbit’s shares were listed at USD50 per share on the New York Stock Exchange. Now, it’s a measly USD8.40. Some observers suggest that this was due to stiff competition from arguably more complete fitness smartwatches like the Apple Watch, but analysts reports indicate that smartwatch sales, in general, are tanking.
From where I’m standing, it seems like the smartwatch may be going down the route the tablet did after its hype had died down. Sure, it complements your smartphone, but when push comes to shove, people will almost always buy a smartphone instead.
What do you guys think of this move? Can you think of why Fitbit would want to buy Pebble? Let me know in the comments below.