Fitbit wants to retain some Pebble staff and all the intellectual property assets
Fitbit and Pebble have confirmed that the former will acquire the latter’s assets for an undisclosed amount, following reports last week that the two companies were in talks.
However, it seems like it is now the end of the line for the Pebble brand: “The acquisition excludes the company’s hardware products,” a press release said, and instead covered, “key personnel and intellectual property related to software and firmware development.”
This squares away with Fitbit’s desire to expand its healthcare offerings, according to Fitbit CEO and Co-founder James Park.
From its initial launch of fitness-tracking devices, the wearables company has become the leading market player, but needs to diversify given the slowdown in the market’s growth, according to The Financial Times. In addition to Apple and Google, it faces competition in Asian markets as sellers there are catching up with new, cheaper wearables.
Indicative of this approach is Fitbit’s announcement, also this week, that they are collaborating with Medtronic to roll out a mobile app, the new iPro 2 myLog, which will help diabetes patients monitor their blood glucose levels.
The talent and proprietary content that Pebble brings to the table will give Fitbit a big boost in terms of technical capabilities. Pebble has been working on high-end smartwatch technology that Fitbit can now take full advantage of. But whatever comes out of the new entity, it won’t bear the Pebble imprimatur.
An additional update, on Kickstarter – that being the platform where Pebble got its start – says that while, “Pebble’s expertise, philosophy, and culture will live on at Fitbit,” the company will stop, “manufacturing, promoting, or selling any new products.” And although, “Active Pebble models in the wild will continue to work,” these are, “no longer covered by or eligible for warranty exchange.”
The company website, pebble.com, will also no longer process returns unless it’s to complete any in-progress before December 7, the day after the acquisition formally passed. Add to this the notice that the Pebble Time 2 and Pebble Core devices are also cancelled.
Core, the most anticipated of the pair, is/was a multifunction 4GB Android keychain-mountable device with GPS tracking, fitness monitoring, Amazon Alexa, and Spotify installed.
For all the praise Pebble’s devices earned, though, the company was suffering already, laying off 25% of its staff earlier this year. Even though Pebble slashed prices and before its acquisition by Fitbit, they had raised over $58 million – of which more than half of that via crowdfunding – the market outlook wasn’t rosy. Fitbit likely paid less than $40 million for Pebble in the end, much less than Pebble CEO and Founder Eric Migicovsky initially sought.
Now it’s up to the remaining Pebble design team member and their new bosses at Fitbit to move forward. If they can weather lean times now, the International Data Corporation forecasts a brighter future, with smartwatch sales projected to more than triple between now and 2020.