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$40m Pebble deal speaks volumes about smartwatch industry

close up of businessman hands with smart watch

Fitbit is reportedly out to buy smartwatch manufacturer Pebble for $40 million in a move which brings home the limitations in the segment.

Pebble is generally admired in the smartwatch segment which was clearly demonstrated in its Kickstarter campaign last year. The team reached its funding goal in roughly 17 minutes, but that would appear to be the peak in fortunes for the business, as it would appear to have slowly declined since.

Fitbit is reportedly buying Pebble to gain control over its IP, namely the PebbleOS, which has a large number of apps running on it already and can be paired with both iOS and Android. Considering Fitbit is pretty good at manufacturing its own smartwatches should the acquisition turn out to be true it will be unlikely to continue to manufacture Pebble.

Although one manufacturer buying another is a solid angle, this possibly isn’t the most interesting area which has come to light. Fitbit is apparently putting up between $34-40 million for the brand, though Techcrunch has reported Citizen was interested in purchasing Pebble for $740 million in 2015, and Intel put forward $70 million earlier this year. Over the course of 18 months $700 million has been wiped off a potential acquisition price tag.

Just to put that into a bit more perspective, that roughly 5% of what Citizen offered last year.

The global smartwatch market has been in decline for the last couple of quarters and the product itself is not proving to be much more than a gimmick. For full functionality, the watch is still tethered to the user’s smartphone; standalone connectivity has not been achieved. It’s an expensive extension of the phone.

You can make phone calls and answer emails on it, but have you ever tried, it’s not that practical. Your correspondent would rather undertake the painful experience of getting his phone out of his pocket.

Smartwatch sales will receive a boost over the next couple of weeks as we wander towards Christmas, but the price rumoured price Fitbit is forking out for Pebble shows how much of a decline the segment is going through. It was a nice gimmick for a while, and there may be a few fitness fanatics who will swear by them, but let’s be honest, smartwatches were never going to take over the world.

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One comment

  1. Maxine Pierson 05/12/2016 @ 1:52 am

    Excellent perspective ; however- the juztwatch. multi sector platform capabilities have not been addressed.

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