Fitbit has been in the business of smartwatches for a while now and even though they have been making a lot of success and breakthroughs in this regard, they are still left to compete with big time companies like Apple who remain their biggest rival in the business. It is then understandable that most of the decisions that would be made by the executive board would be for a lot of things, eliminating and staying above competition being one of them and we have reasons to believe that this is one of the driving focus behind the most recent acquisition of the company.
In a move that started to make the press and was announced not long ago, Fitbit reached put to Pebble, another manufacturer of smartwatches and a smaller rival for the former company and purchased its assets. This gives them the right to use the technology and software component that have been developed by Pebble for the betterment of their research and work towards making their smartwatches the best and most elegant pieces of hand accessory on the market. In a statement that was made official by Fitbit itself, they have said that the deal does not include the hardware components that had been developed by Pebble and mainly required that the engineers from Pebble come over to work with them also. To cap it all off, Fitbit now as the right to the intellectual property of Pebble in the smartwatch race which includes but is not limited to the operating systems, applications optimized for the watch and as well, the dedicated cloud services.
Speaking on the matter were some inside sources who although didn’t disclose the amount that the deal cost, did state that it was less than the $40 million mark. For Pebble, this might still be good money but doesn’t remove them from the pit of debt that they have managed to get themselves into and most importantly, Fitbit didn’t buy them out enough to mean that it would be taking on the debts of the company. Since the hardware components are not included in what they have signed on for Fitbit, it stands to reason that the company aims to sell all of its other assets such as their inventory and server equipment to other independent contractors and companies.
While we would have loved Pebble to stay in the market and keep to their pursuit of technology which they aim and hope would make the world of wrist-watches a better place, one cannot blame them for what the force of the market has reduced the company to. Their fire sale came on the back of financial struggles that they have been and the smartwatch market failing to grow even with the amount of exposure and hype that it has been receiving over the years. Simply, people are not warming up to the technology yet, and Pebble is one of those companies that might just have been born too soon.
According to research that was carried out by IDC, shipments in the smartwatch industry declined by a massive 52 percent in the third quarter of this year one and with major players being steps ahead of even Pebble, it means that majority off the slump fell into their region. At a pace like that, it was important that they cut their losses fast the way they did and lick their wound too while hoping for something better, a steep rise in the smartwatch market maybe, to come up.
It goes without saying that other companies in the market are doing exceptionally great though as they are only being supported by their stubbornness and as well, the fact that they still have some funding to go on. In the example of Fitbit itself, the company cut itself a forecast on the holiday sales, and after that, their stocks went down with a massive 34 percent on the 3rd of November. This is due to the pressure mounted by the main rival, Apple, who is unsurprisingly not doing so well too in the market but still has hopes for the future according to CEO, Tim Cook. Fitbit would then stop at nothing to make sure that it breaks even and even surpasses the Cupertino-based company as only then can they start to look forward to some healthy stocks percentages.
Already, Fitbit has started to send out job offers to up to 40 percent of the present workforce that Pebble has and of these, the majority are software engineers in the company. The people from hardware divisions were offered no jobs at all in this new system, and only a few of the engineers based on interface got the same invites. This goes on to speak volumes that Fitbit is neither interested in the hardware developed by Pebble nor do they think it’s hardware surpasses theirs, making the software perspective the gold mine they wish.
In the other but equally related news, any stocks that are being held by shareholders of Pebble would now become useless as of the time of the deal. However, for the releases promised by the company, only the Pebble 2 would ship out to those who funded the project and the other Time 2 and Pebble Core devices would be canceled. Customers that have preordered would, however, get their full refunds. For Fitbit, only time would tell if this was just the missing piece of the puzzle that would give an even break for both them and Apple. Only time, will tell.Google+