Rumours emerged last week that Fitbit was looking to acquire struggling smartwatch company Pebble. A new report yesterday shed new details. Citing people familiar with the matter, Bloomberg suggests that the buyout will focus on Pebble’s software assets.
The deal reportedly includes job offers for about 40 percent of Pebble’s staff, mostly software engineers. Pebble staff in other roles, such as interface designer or hardware engineers, did not receive offers from Fitbit. Some have apparently already received severance packages instead.
With the acquisition focused on software, the rest of Pebble’s assets, including both present and future products, will be dealt with separately. Existing inventory will be sold off while upcoming products like the Pebble Time 2 and Pebble Core will be canceled and pre-orders refunded.
Fitbit will also acquire the Pebble brand. It remains to be seen if it will use it though.
Pebble CEO Eric Migicovsky is not expected to join Fitbit. He will instead return to Y Combinator where he will take on a role “as a partner advising early-stage companies on hardware development.”
Fitbit will reportedly spend US$40 million to acquire Pebble’s software assets.
Smartwatch sales have plummeted in recent months. IDC reported a sharp 51.6% drop last quarter with volumes falling from a total of 5.6 million smartwatches shipped in Q3 2015 to 2.7 million in Q3 2016.
Source : Bloomberg