Last week, a report from The Information claimed Fitbit was looking to buy Pebble for around $40 million. Today, the two companies confirmed the acquisition. The purchase price has not been disclosed. The creator of what many consider to be the original smartwatch will soon be gone from shelves.
Pebble attributed its shut down to “various factors” that prevent it from continuing to operate as an independent entity. The company has significant debts and has recently laid off 25 percent of its workforce in a cost-cutting move. Pebble confirmed it is ceasing to trade and no new devices will be manufactured. It thanked fans for their support over the years, promising existing watches will continue to operate as normal “for now.”
The company acknowledged that the functionality of its watches “may be reduced in the future” once the deal is complete. It has not clarified whether customers will be able to keep using their devices indefinitely. As of today, Pebble will not be fulfilling any new orders. It has cancelled all pre-orders of its upcoming Pebble Time 2 and Pebble Core products and will be refunding every Kickstarter pledge made on the devices. Neither product will see a public launch.
Fitbit is acquiring “specific assets” of Pebble primarily surrounding its software-related intellectual property. Many developers will also be moving to Fitbit where they’ll continue to work on wearable products. Fitbit said the new resources in terms of staff and software will help it to launch new products with more advanced features and functionality. It hasn’t specified what the technology will be used for.
“With basic wearables getting smarter and smartwatches adding health and fitness capabilities, we see an opportunity to build on our strengths and extend our leadership position in the wearables category,” said James Park, CEO and co-founder of Fitbit. “With this acquisition, we’re 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, as well as build the tools healthcare providers, insurers and employers need to more meaningfully integrate wearable technology into preventative and chronic care.”
Pebble described the sale as “difficult” and a “bittersweet day.” It has been anticipated for some time though as Pebble has repeatedly refused other offers despite its fortunes continuing to fall. Earlier this year, Intel reportedly presented $70 million in an unsuccessful bid to buy the company.
Pebble has found the smartwatch market more challenging than it first anticipated. Wearables haven’t undergone the same “must-have” revolution as smartwatches did, contradicting initial speculation. Fitbit itself is known to be struggling and other established companies are facing similar issues. Recently, Motorola said it has indefinitely suspended the launch of any new Android Wear smartwatches because there isn’t “enough pull in the market.”
Pebble’s shutdown has come as a disappointment to fans and a signal of the wider troubles in the wearables industry. CEO Eric Migicovsky won’t be amongst the Pebble employees moving to Fitbit, according to a report from Bloomberg today. Instead, Migicovsky will return to startup incubator Y Combinator and adopt a role advising companies on hardware development. Fitbit will be closing Pebble’s offices and taking on around 40 percent of its staff.
“While dissolving Pebble as you know today is difficult, I am happy to announce that many members of Team Pebble will be joining the Fitbit family to continue their work on wearable software platforms,” said Migicovsky. “Pebble’s successful approach to third-party wearable development is undeniable, and Fitbit is welcoming our expertise in this space wholeheartedly.”
