Acquisitions happen all the time, Microsoft purchased Nokia a few years back and Samsung acquired Harman not so long ago. Larger conglomerates absorb smaller companies, while still allowing them to produce products under their own unique brands.
And soon we’re going to see something similar happen in the world of wearables. According to a report coming out The Information (subscription needed), fitness wearable maker Fitbit is currently in the process of buying Pebble for a sum between believed to be between $34 million and $40 million.
Pebble which debuted back in 2012 in Kickstarter with a successful campaign that raised over $7 million, seems to be going through a rough period. Despite being quite popular among wearable lovers, the brand has had difficulty in keeping afloat. Back in March, the company was forced to lay off about 25% of its employees.
Times have changed since 2012. Big players in the tech industry including Apple, Samsung, LG, Motorola and Huawei have descended in the wearable arena with products that are more attractive and offer a lot more function.
Pebble seemed to be unfazed by the arrival of Apple Watch, which ultimately proved to be a big mistake.
If everything goes through, Pebble’s intellectual property and software will go to Fitbit. The fitness maker’s initiative to purchase Pebble, comes at a time when interest for smartwatches and fitness tracker is waning. According to a recent report from IDC wearables, the wearable market has seen a decline during the Q3 with 52% compared to the same period last year.
Not only Pebble has been experiencing financial troubles, but also Fitbit which reported mixed Q3 financial results and weak guidance for the holiday season. But who knows, maybe the forces of the two iconic wearable companies combined will help Fitbit advance towards a better future.
Fitbit might be also looking to expand into new product niches. The company unveiled the Change 2 and Flex 2 in August, but also a line of luxe leather bands and premium accessories.