Pebble, the brand which introduced the concept of the modern smartwatch to many people, is shutting down, and will be selling its core assets to Fitbit.
Fitbit, known for its fitness trackers, has confirmed its acquisition of specific Pebble assets, “including key personnel and intellectual property related to software and firmware development. The acquisition excludes the company’s hardware products.”
The asset acquisition also excludes Pebble CEO Eric Migicovsky who, according to Bloomberg, is said to be joining Y Combinator. Bloomberg reports the acquisition of Pebble assets cost Fitbit less than $40 million, and the company has sent job offers to 40 percent of Pebble’s staff.
Both companies know plenty about wearable technology. Fitbit has recently launched a smartwatch of its own, the love-it-or-hate-it Blaze. For its part, Pebble doesn’t, or didn’t, just make hardware. Its watches run PebbleOS, an operating system which is compatible with both iOS and Android, and it operated a packed app store featuring a massive choice of watch faces, apps, and games.
Both Pebble, which found initial success in its smartwatch Kickstarter campaign in 2012, and Fitbit have been struggling financially this year — but that extends to most smartwatch manufacturers. The market is seeing declining sales, according to the International Data Corporation’s latest estimates. Hardly any Android Wear smartwatches have been released this year, and sales of the Apple Watch are said to be down nearly 70 percent from this time last year. Apple CEO Tim Cook has disputed the estimates, saying the Watch is “on track for the best quarter ever.”
Fitbit hasn’t detailed its exact plans for its new assets from Pebble, but the company says the acquisition will help cement its leadership in the wearables market.
“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,” said James Park, CEO and co-founder of Fitbit, in the announcement.
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This deal isn’t good for Pebble fans, and is even worse news for backers of Pebble’s most recent Kickstarter campaign, due to the cancellation of the Pebble Time 2 and Pebble Core. The company already began shipping the new Pebble 2, but as “Pebble is no longer able to operate as an independent entity,” the company is shutting down production and will not manufacture the Pebble Time 2 or the Pebble Core.
Pebble owners’ devices will continue to work as normal, but the company does say “Pebble functionality or service quality may be reduced in the future.” Kickstarter backers will receive a full refund within four to eight weeks, and the same goes for any orders from Pebble’s website. Warranty support is also no longer available for Pebble watches.
Pebble laid off 25 percent of its staff back in March, signaling times were hard, but Fitbit hasn’t had the best of years either. In January, its stock price fell by 35 percent in a week.