Crowdfunding hero and smart bling pioneer Pebble is about to be acquired by Fitbit. The Information was first with the story, and subsequent reports suggest the price is modest: around $35 to $40m.
The company launched its first smartwatch under the Pebble name on Kickstarter in 2012 after Vancouver engineering student Eric Migovsky found it was difficult to read Blackberry alerts while cycling. Migovsky asked for $100,000... and got £10m, and Pebble was off to the races.
Beating over-specced platforms from Apple and Google to market, the Pebble rapidly gained a hobbyist developer following. Boasting a week-long battery, Pebble retained a market share of 8.6 per cent, shipping 1.8 million watches in 2015, according to IDC.
But the perception that the smartwatch category was a bust (Android Wear flopped, and Apple Watch is sustained by vast marketing budgets and High Street exposure) began to affect Pebble. In March it laid off 25 per cent of its 160-odd staff and changed strategy to focus on health.
It was a poorly executed pivot that caused further disgruntlement among faithful users. The bloatware health app left little room for other apps, until an August update repaired the damage.
Uber was the big name app for Pebble, but it wasn't enough
By contrast, Fitbit claimed 18 million device activations last year, and expects revenue to be around $2.32 to $2.45bn for fiscal year 2016.
So the acquisition would be a drop in the ocean for the market leader.
Interestingly, Fitbit says 60 per cent of its activations come from new users, and 40 per cent from repeat customers. But of the latter, 20 per cent are reactivations. People notoriously try an activity tracker then put it away. Even in the one wearable market segment that can be considered a success, it isn't a "sticky" habit. ®