The smartwatch market is about to get a little bit smaller, as Fitbit swoops in to buy the struggling smartwatch maker Pebble, for as little as $40m.
The Pebble smartwatch is regarded as one of the first great success stories of crowdfunding campaigns, and in particular, the beginnings of the Kickstarter website.
Having only originally set out to receive $100,000 in crowdfunding in 2012, the start-up found itself finishing with $10m, soon becoming one of the pioneering smartwatch brands.
A declining market
But the last few years have been tough not only for the company, but the smartwatch market in general. A recent report from IDC showed that Pebble watches only accounted for 3.2pc of a rapidly declining market.
With debts piling up and smartwatches remaining unsold, the company has taken the decision to accept an offer of $40m from its competitor and fitness wearables producer, Fitbit.
According to The Information, sources revealed that Fitbit was set to acquire the smartwatch maker for a small sum, resulting in Pebble’s products gradually being phased out over time, with all its intellectual property being merged into Fitbit.
A source close to TechCrunch was able to determine the sum of $40m and that this amount “barely covers [Pebble’s] debts”.
This marks an extraordinary turnaround in fortunes for Pebble, who last year was believed to be the subject of a $740m bid from watchmaker Citizen, a deal that eventually collapsed.
What’s in it for Fitbit?
Signs of the company’s demise were becoming evident, as it let go one-quarter of its staff earlier this year to stem losses. It also began searching for investor funding to keep the business afloat.
In a now deleted tweet, Pebble appeared to confirm the news with a shrug emoji.
The deal would also appear to signal the cancellation of the launch of Pebble’s latest Core device that it had planned to release in early 2017, which would have offered more of a challenge to competitors like the Apple Watch.
As to what Fitbit sees Pebble bringing to the table, it is believed that it wants access to its operating system – PebbleOS – which has one of the largest app catalogues on the smartwatch market.