The smartwatch market has become increasingly competitive, so Pebble must compete with companies such as Apple, Samsung, Motorola, and more as they step into the smart wearables market. Some had already seen this coming.
Still, the layoff is rather interesting considering the startup has raised $20 million with its second, very successful Kickstarter campaign, and Migicovsky also confirmed that his company had raised $28 million in debts and venture financing over the past eight months. According to TechCrunch, Migicovsky blames “a more cautious outlook from VCs focused on tech” as the primary reason for letting 40 of Pebble employees go.
Also part of the problem is that smartwatches haven’t really taken off as expected. While the market has great potential, largely thanks to Pebble, the first to ignite demand for such wearables, no company has so far created a truly groundbreaking product.
In a sudden move, Apple has discounted its own smartwatch, the Sport model, which previously retailed at $350 (USD) but now sells for $299 (USD). It’s hard to say whether Apple made this move because the Watch isn’t selling as expected, because the company hasn’t released any sales numbers.
Despite being an affordable alternative, Pebble faces fierce competition in a niche market, and business can therefore be tough.