Fitbit hit on Pebble kit cost just 20 million quid? Oh s**t!

Wearables giant finally reveals cost of gobbling up and killing off rival hardware

Fitbit has confirmed the long-held belief that it scooped up rival wearables maker Pebble for a bargain basement price before murdering the watchmaker.

Exercise-band maker Fitbit said in its latest quarterly earnings on Wednesday that it paid a mere $23m (£19m) when it agreed to purchase and then kill off Pebble's line of competing smartwatches.

This is the first confirmation of what Fitbit paid for Pebble, though it has long been believed that the ailing smartwatch maker had been sold for just a fraction of what it received in investments and backing from its Kickstarter campaign. In fact, $23m was significantly less than what early reports had speculated the price would be.

There won't be much gloating from Fitbit, however. The company reported a drop in Christmas sales, as it sold just 6.5 million wristbands over the October-December period, down from 8.2 million the year before. Revenues for Q4 2016 were $573.8m (£461m), down 19 per cent year-on-year. However, for all of 2016, sales stood at $2.17bn (£1.74bn), up 17 per cent.

Despite this overall increase, rebates and price reductions, the cost of acquisitions, spending on more employees, an inventory write-off, and equipment costs all led to Fitbit reporting a $146m (£118m) loss on the final quarter of 2016, and a $103m (£82m) loss on the full year.

This time a year ago, Fitbit made a $64m (£52m) profit in the final three months of 2015, and $176m (£141m) profit for the whole year. Oops.

Fitbit expects the losses to carry on into the coming quarter and year, where it currently projects annual revenues to fall to somewhere between $1.5bn and $1.7bn (£1.2bn and £1.4bn) in 2017. ®

Note: All pound sterling figures quoted were calculated using today's exchange rate from the-then dollar figures, not using historic exchange rates.

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