Last week it was rumoured Fitbit was set to acquire smartwatch maker Pebble, and now the deal has become official as expected.
In an email to customers, Pebble explained the following:
Fitbit has agreed to acquire key Pebble assets. Due to various factors, Pebble can no longer operate as an independent entity, and we have made the tough decision to shut down the company. The deal finalized today preserves as much of Pebble as possible.
Pebble is ceasing all hardware operations. We are no longer manufacturing, promoting, or selling any new products. Active Pebble models in the wild will continue to work.
Making Awesome Happen will live on at Fitbit. Much of our team and resources will join Fitbit to deliver new “moments of awesome” in future Fitbit products, developer tools, and experiences. As our transition progresses, we’ll have exciting new stories to tell and milestones to celebrate.
In essence, Pebble will stop promoting, making and selling their devices, which will continue to work as normal. The company says “No immediate changes to the Pebble user experience will happen at this time.”
Pebble details on their company blog “functionality or service quality may be reduced in the future,” which basically translates to your smartwatch is going to soon lack support and updates.
Pebble says warranty support is also no longer available, but returns completed before December 7, 2016 will be refunded by their support team.
Kickstarter backers who have not received their smartwatch will receive a refund to their credit cards in 4-8 weeks.
Earlier this morning, Bloomberg reported the deal excluded Pebble’s hardware, as Fitbit was only interested in software engineers, testers, plus intellectual property. The price of the acquisition is said to be less than $40 million, which falls in line with previous reports.
Pebble stock owned by employees are worthless as part of the deal, as money will head to debt holders, main investors, and refunds, say unnamed sources. Meanwhile, CEO Eric Migicovsky is said to rejoin Y Combinator as a partner.
According to TechCrunch last week, Pebble could have cashed out early, as sources claim watchmaker Citizen wanted to offer the latter $740 million in 2015, while Intel offered $70 million prior to the launch of Pebble 2. Canadian CEO Eric Migicovsky declined both offers. The Fitbit offer is “barely covering their debts,” claimed Pebble sources.
The wearables market has struggled this year, with Fitbit stock falling 73 per cent this year alone. Earlier this week, Apple CEO Tim Cook said Apple Watch sales in their first week of holiday sales set a new record, countering an IDC report sales had dipped over 71 per cent year-over-year.
Hindsight is 20/20, and nobody saw this coming during the height of Pebble’s popularity. We experienced the original Pebble and its successor, but ditched both when Apple Watch launched. The news sucks for existing Pebble users as eventually support and updates will be phased out.
Anyone out there still rocking a Pebble smartwatch?