Fitbit Buyout Will See Pebble's Time 2 and Core Wearables Canceled, Refunds Issued

[MacRumors]

Late last month we reported that Fitbit was closing in on a deal to acquire smartwatch maker Pebble "for a small amount". Bloomberg has now revealed that the buyout will cost "less than $40 million" and exclusively concerns Pebble's software assets, which are being sought by Fitbit "in a bid to better compete with Apple", according to people familiar with the matter.

Yesterday's update on the details of the acquisition comes at a time when the wearables market as a whole appears to be facing increased uncertainty and significant profit hurdles. Earlier this week, in response to IDC market research claiming that Apple Watch's share of the wearables market had fallen to 5 percent, Apple CEO Tim Cook said Apple Watch's sell-through rate had hit a new high. Cook was responding to data which suggested fitness trackers "reigned supreme" in the market, yet Fitbit has seen its own struggles, with the company's shares tumbling 30 percent after announcing mixed third-quarter results and weak guidance for its fourth quarter.

To improve its standing in the market, Fitbit reportedly wants to hire Pebble's software engineers and testers, and get hold of intellectual property including the Pebble OS, watch apps, and cloud services. The $40 million buyout sum does not include Pebble's debt and other obligations, product inventory or server equipment, all of which will be sold off separately, said the people, who asked to remain anonymous.

The news all but confirms the end of the road is in sight for Pebble's entire product line-up, including its most recent smartwatch announcements, the Pebble 2, Time 2, and the Pebble Core. The Pebble 2 has already started shipping to people who funded the startup through crowd-funding site Kickstarter, but the Time 2 and Pebble Core will be canceled and refunds will be issued to Kickstarter backers, said the sources.

Following the buyout, Pebble's offices will be closed and former engineers will relocate to Fitbit offices in San Francisco. There's no word yet as to whether Fitbit will decide to use the Pebble brand in future.

The deal will make Pebble stock held by employees "worthless", said sources, with the money earned on the acquisition going to debt holders, vendors, some equity investors, and Kickstarter refunds for the Time 2 and Pebble Core orders.

Article Link: Fitbit Buyout Will See Pebble's Time 2 and Core Wearables Canceled, Refunds Issued

 

[adib]

Does this mean existing Pebble watches would stop working? There's plenty of functionalities that depends on their Internet service:

• Installing apps
• Configuring watchfaces
• Voice transcription

 

[44267547]

Unfortunate for Pebble. To little too late. And in the midst of this, it's Eric Migicovsky's (CEO) fault for failing to rejuvenate a dying brand that fell static and relied on Kickstarter for all their products.

Simple marketing and implementing change would have assisted in Pebble's earlier years.

 

[sunapple]

Damn, what a disaster. Sucks for everyone involved, seemed like a group of passionate people.

 

[Porco]

It was a rocky road for Pebble and built like a house on sand, maybe the cracks were beginning to show. They could have kept going skimming a profit off the surface, but if one product dropped like a stone they might have dashed all their hopes and been sunk. Hopefully this way all their hard work can result in something more concrete, and everyone can soon feel more chipper about the future.

 

[normen]

Hehehe, this is hilarious. From day 1 the pebble software was the worst thing about it. It never got much better during the lifetime of the pebble (I had the first pebble and pebble time) - I can't stop laughing that this is what fitbit bought xD xD xD

Not saying this as a disgruntled user btw but as a programmer.

 

[prowlmedia]

Does this mean existing Pebble watches would stop working? There's plenty of functionalities that depends on their Internet service:

• Installing apps
• Configuring watchfaces
• Voice transcription

Definitely. Terrible news for Pebble owners. Perhaps Fitbit will see sense though. And still call it the Fitbit pebble and continue the brand - The watches are really pretty good at what they do.

Can't believe they were in that much trouble they had to sell out. The thing is they are reported to be buying them for the engineers amongst other things... but if their stock is worthless they are going to be really pissed off and just walk, which can easily kill the OS development anyway. I'd certainly walk unless I got equivalent fitbit shares...not that they are great anyway.

It seems to me the founders are taking the money and running.

 

[Glassed Silver]

Does this mean existing Pebble watches would stop working? There's plenty of functionalities that depends on their Internet service:

• Installing apps
• Configuring watchfaces
• Voice transcription

Another beautiful example of why I don't trust "the cloud" for anything permanent and opt to avoid it as much as I can.

Not possible with every service or product, but I'm certainly trying not to let myself get screwed too much.

To think some folks in the gaming industry think that gamesaves, vast amounts of computing for a given game and other things should be (partially) relegated to the cloud scares me and that's just one of many examples.

Glassed Silver:ios

 

[maflynn]

So there will be no more pebble, I guess Pebble was on more shaky ground, if they were willing to sell for such a small amount.

 

[dannys1]

The main thing I hate about all this and Apple products in general at the minute is that everything has been seen as a massive success or market leading to be worthwhile doing - otherwise it gets slammed in the media.

It's not the profit margins that Apple then does it for, it's good PR - if Apple makes something that isn't market leading the media go crazy about it not being the most popular device and the demise of Apple starts - it's easier for them to drop things or not bother at all.

That coupled with a phone that's far too successful all means we don't really get niche products from Apple.

I love the watch and hope they continue with just for the people who love it, regardless of if it's the first or tenth most popular device - being popular doesn't necessarily (and quite often is the complete opposite) mean being good.

 

[iCloudStrife]

It was a rocky road for Pebble and built like a house on sand, maybe the cracks were beginning to show. They could have kept going skimming a profit off the surface, but if one product dropped like a stone they might have dashed all their hopes and been sunk. Hopefully this way all their hard work can result in something more concrete, and everyone can soon feel more chipper about the future.

Those are some stone cold rock references.

 

[niun]

Hehehe, this is hilarious. From day 1 the pebble software was the worst thing about it. It never got much better during the lifetime of the pebble (I had the first pebble and pebble time) - I can't stop laughing that this is what fitbit bought xD xD xD

Not saying this as a disgruntled user btw but as a programmer.

Yeah, I often have a chuckle at loads of people losing their jobs before Xmas.

 

[Abazigal]

Definitely. Terrible news for Pebble owners. Perhaps Fitbit will see sense though. And still call it the Fitbit pebble and continue the brand - The watches are really pretty good at what they do.

Can't believe they were in that much trouble they had to sell out. The thing is they are reported to be buying them for the engineers amongst other things... but if their stock is worthless they are going to be really pissed off and just walk, which can easily kill the OS development anyway. I'd certainly walk unless I got equivalent fitbit shares...not that they are great anyway.

It seems to me the founders are taking the money and running.

I think the money Pebble is being bought out for (~40 million) is barely enough to cover their debt. Fitbit is essentially absorbing their debt, which means the owners of the company may well be left with nothing (beyond what they have already cashed out).

Considering that Fitbit just wants their software expertise and is phasing out the hardware, I think this is the last we will see of Pebble as a hardware brand.

 

[jonnysods]

I'm guessing the CEO was trying to get out before it crashed?

It was an exciting startup!

 

[xDKP]

So they will buy it purely for the people? This seems like they don't need/want their brand/products

 

[maflynn]

I'm guessing the CEO was trying to get out before it crashed?

It was an exciting startup!

I didn't think they had a business model that was sustainable.

 

[rikscha]

Good, all things terrible have to disappear eventually.

 

[niun]

Well I'm peeved. Love my Pebble Time and was looking forward to getting a Time2. At leat I'll be getting a refund.
Hope the Pebble folks manage to land on their feet.
Bummer all round really.
[doublepost=1481111663][/doublepost]

Good, all things terrible have to disappear eventually.

Like.. Maybe that attitude?

Seriously. Did you mistake Pebble for Aids or something?

 

[honglong1976]

Still nothing confirmed yet.

Just another paraphrased article!

 

[weave]

Another beautiful example of why I don't trust "the cloud" for anything permanent and opt to avoid it as much as I can.

Smart. I have a bunch of outdoor security cameras that feed video through the cloud. The one day I had an issue and needed to watch my house from 200 miles away, their **** was down. No access to live video, and nothing was recorded either. It was Halloween night and everyone was watching kiddies doing trick or treat so they got overloaded and their only response was "Whoops, our servers got spooked, lol"

 

[Abazigal]

So they will buy it purely for the people? This seems like they don't need/want their brand/products

The pebble brand doesn't really have a lot of value outside of a small, more tech-minded community. People look at the pebble watch on my wrist and the first thing they ask me is "Is that the new Apple Watch?" If Fitbit does release a similar smartwatch, it will likely be under their own fitbit brand (which is more universally recognised).

 

[neoelectronaut]

What a damn shame. I love my Pebble Steel that I bought two years back and I was hoping to supplement it with a new Pebble model next year.

Man, 2016, what the **** man.

 

[Cloudane]

Embrace, extend, extinguish.

Fitbit is the new EA - won't be buying from them again!

 

[Stella]

So Fitbit just bought the developers from pebble? Would be a shame if they all quit!

I would buy a pebble over a Fitbit.. Fitbit smart watches and fitness trackers are lame.

 

[ctyrider]

Yeah, I often have a chuckle at loads of people losing their jobs before Xmas.

Don't think this will result in "loads of people losing their jobs". OK, probably a few admin types will, but I am sure technical people will be file. The whole reason Fitbit acquired Pebble is their engineers and IP.