Fitbit is acquiring parts of Pebble, but it’s more interested in the company’s intellectual offerings than Pebble’s smartwatches.
In a transaction completed Tuesday, the fitness tracker-maker revealed that it had acquired “specific assets” of Pebble, which made one of the first popular smartwatches, including “key personnel and intellectual property related to software and firmware development.” The deal did not include the company’s hardware products, which were a number of smartwatches that were among the first to market in 2012.
In a blog post, Pebble chief executive officer and cofounder Eric Migicovsky wrote that “due to various factors — Pebble is no longer able to operate as an independent entity. We have made the tough decision to shut down the company and no longer manufacture Pebble devices.”
According to a recent report from the International Data Corp., Fitbit leads in market share among fitness trackers with 23 percent; meanwhile, Pebble has worked to offer a more fashion-forward design but ultimately had to lay of 25 percent of its staff earlier this year, or about 40 people.
A Fitbit spokeswoman said the acquisition allows the company to increase “development speed and efficiencies for new products, features and functionality,” including health and fitness features, enabling customization and easier collaboration with the health-care ecosystem.
Pebble, for example, is known for being “device agnostic,” meaning that it connects with iPhones or Android smartphones. In a release, Fitbit noted that Android usage accounts for 90 percent of global smartphones, so the ability to offer devices that work with any type of smartphone is a competitive advantage. Fitbit devices are compatible with more than 200 Apple, Android and Windows phones. (Most smartwatches, alternatively, are designed to work with one specific operating system.)
On the personnel front, the acquisition includes staff with expertise in platform development. Pebble ceo Migicovsky will be taking an “active role” in helping the Pebble team with the transition, a Fitbit spokeswoman said. She added that the majority of Pebble software engineers, as well as some other employees, would join Fitbit.
“With basic wearables getting smarter and smartwatches adding health and fitness capabilities, we see an opportunity to build on our strengths and extend our leadership position in the wearables category,” said Fitbit ceo and cofounder James Park. “With this acquisition, we’re well positioned to accelerate the expansion of our platform and ecosystem to make Fitbit a vital part of daily life for a wider set of consumers, as well as build the tools health-care providers, insurers and employers need to more meaningfully integrate wearable technology into preventative and chronic care.”
Fitbit, which started with a fitness tracker in 2007, was said to be paying less than $40 million for Pebble, according to several published reports, but a company spokeswoman said the acquisition is not material to Fitbit’s financials.” Fitbit in August reported revenues of $586.5 million. Pebble raised more than $45 million.