Pebble CEO Eric Migicovsky has announced that the company will be closing and selling all of its assets to Fitbit, a top maker of wearable fitness devices. Supposedly the deal was struck at $40 million. Fitbit also confirmed this deal in their own statement. Fitbit co-founder and CEO James Park said in the statement that they plan to build their company as smartwatches become more advanced and add more health and fitness options for users.
While it’s unclear why Pebble had to shut down, Migicovsky said that they wished to align with Fitbit, sharing a common vision in wearable technology. It is likely that increasing competition from companies like Fitbit, Apple, and Samsung contributed to the fall of Pebble.
Despite losing to some strong competition, Pebble still had some successful beginnings. The company began as a Kickstarter campaign for its original watch back 2012. After the success of that campaign, Pebble shipped over 2 million devices worldwide in the company’s lifespan.
As the acquisition came to a close, the deal will end production of all Pebble hardware, as Fitbit wishes to focus on Pebble’s software, potentially incorporating those software features on future Fitbit devices. As a result, the Pebble Time 2 and Pebble Core will not be released.
Both devices, along with the Pebble 2, which just recently shipped, were funded through a Kickstarter campaign that raised about $13 million. In 2015, Pebble went to Kickstarter to release their last batch of wearable devices, the Time and the Time Steel, successfully releasing on May 24, 2015, and August 6, 2015, respectively. For the time being, Fitbit will continue services for Pebble. However, some functionality could be removed as time progresses.
As competition becomes more aggressive in the smartwatch market, consumer interest has dwindled for the wearable devices. Shipment for Apple Watch declined 71% in this quarter, but Apple CEO Tim says that sales are still very strong.
Currently, Fitbit’s devices are referred to as activity trackers rather than smartwatches. The Fitbits don’t have the ability to run different apps like the Apple Watch, so they focus exclusively on fitness functionality. The Pebble devices focus on the basic smartwatch productivity features syncing with Apple and Google platforms to perform tasks, which Fitbit may be interested in implementing in future software updates and future device iterations.
Also Fitbit (NYSE: FIT) stocks have seen a jump after the announcement .We can expect some heated competition in the future as Fitbit works towards catching up with the Apple Watch.