Despite the relatively more successful fitness tracker market, Fitbit, one of the biggest names in that area, is seeing some number problems. It has acquired Pebble, a darling of the smartwatch market, as well as Vector Watch, a move that is mostly seen as an act of desperation to remain in the game. Fitbit, however, was apparently not desperate enough to buy Pebble for its full selling price. Initially rumored to cost $40 million, Fitbit now reports that it bought the smartwatch maker for just $23 million.
While still more than half of Pebble’s initial estimated worth, it is a measly amount if you look a bit further back. Pebble has reportedly tried to sell itself before but it believed that its net worth was $200 million. Given the struggling smartwatch market and the relatively smaller portion that Pebble occupies, it’s no surprise that no one took the bait. And when someone like Fitbit finally did, it really didn’t have much choice but to concede to the buyer’s price.
At least it still did better than Vector Watch. The acquisition was announced back in January but it is only now that we’re seeing the numbers. Fitbit revealed that it spent $15 million for Vector Watch, which is probably still a win considering how smaller the latter is compared to Pebble.
It is undoubtedly a sad year for Pebble fans. Once seen as a champion of the smartwatch market, Pebble’s story has mostly ended in a tragedy no matter how you spin it. There will no longer be any new Pebble devices and even the planned ones like Pebble Core have been canceled. Existing Pebble smartwatches will continue to function to some extent this year but probably not indefinitely. And despite its IP and some of its talent moving over to Fitbit, Pebble as we know it is dead. To add insult to injury, it was only a tenth of what it thought it was worth.
The big question now is how Fitbit will use these new acquisitions to turn its fortunes around. Its sales and revenues dropped last quarter compared to the same 2015 period and it is now looking towards smartwatches for some hope. The smartwatch market, however, hasn’t exactly been that hopeful itself, so it remains to be seen how Fitbit will find salvation in smartwatches.