Fitbit picks up Pebble, throws Pebble as far as it can into the sea

Smartwatch market down by one

Smartwatch maker Fitbit has confirmed it has bought competitor Pebble – for an undisclosed sum – but only its software. Pebble products are on the scrapheap.

The announcement comes a week after news of the purchase leaked, but many had assumed Fitbit would continue to support existing Pebble watches and slowly merge the two product lines.

Not so. All new hardware sales have stopped, effective immediately, with customers still waiting for delivery of the second version of the Pebble being refunded in full. The company said that existing Pebble watches – of which there are two million out there – will continue to work for now but there will be no support or warranties, and "functionality or service quality may be reduced in the future."

In other words, chuck your Pebble in the pond.

The failure of the wearable market to take off – a recent analyst report saying it has grown by just 3.1 per cent in 2016 – meant that Pebble was unable to keep going. In a blog post, Pebble CEO Eric Migicovsky – who will not be joining Fitbit – said the sale was "bittersweet."

Fitbit will take over the company's software and its smartwatch platform and it is expected to keep the software engineers, but everything and everyone else has been dropped.

In its official announcement, Fitbit said the purchase would enable it to "add deep industry expertise" and lead to "the faster delivery of new products, features and functionality while introducing speed and efficiencies."

Advantages

Although Fitbit leads the market in wearables, upstart Pebble, which built itself from the ground up through crowdsourcing, has some advantages over the larger company. Most significantly, due to its open source ethic, Pebble's software has greater flexibility and works with more third-party software. With mass market smartwatch and fitness tracker growth appearing to have stalled, Fitbit is looking to reach out with more customized products.

Fitbit CEO James Park said: "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."

Or, in other words, we've realized that consumers just don't want wearables that much.

That same conclusion was reached by analysts at IDC this week, who dared to say that Apple's much-lauded but widely mocked Apple Watch has seen sales fall by 71 per cent in 2016 – a claim that Apple CEO Tim Cook immediately disputed, claiming that the current quarter was the "best ever" for the watch in terms of sales.

Cook may be right – the IDC figures cover up to September and the second version of the Apple Watch only became widely available after that. Even if Apple has its best quarter for smartwatches, the 71 per cent drop reflects what many are feeling: that the Apple Watch is just not worth it, with its small, limited screen and high price point.

Some degree of market acquisition and shakeout was inevitable, but everyone was hoping it would be under better circumstances. ®


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