Why Fitbit buying Pebble makes sense — at least, in the short term

Late yesterday it was reported by The Information that Fitbit is close to buying wearable startup Pebble, news that has since been independently confirmed by The Verge. Fitbit and Pebble have been in the final stages of the deal since before the Thanksgiving holiday; the buying price has not yet been confirmed. While it ultimately might not be as good of a deal as Pebble would have hoped for, there are a lot of reasons why a Pebble-Fitbit deal makes sense.

First, the deal comes at a time when the wearables market is facing a day of reckoning. Google delayed its next version of Android Wear software until next year, and three key makers of Android Wear watches — LG, Huawei, and Motorola — held off on launching new hardware this fall. Jawbone is reportedly looking to sell itself. And Fitbit, despite being the clear leader in the wearables industry, just saw its stock fall off a cliff after it forecasted a dismal holiday quarter.

Consolidation comes as no big surprise then — see also Nokia and Withings, or the number of digital health apps that have been snatched up by larger companies. Ever since the notion of the quantified self first became a thing with these digital trackers, their perceived value has been largely dependent on how much data they could gather, and how companies could use that data. If a company is struggling to sell hardware, it could always sell off its platform or its data.

Second, for Fitbit, acquiring Pebble would mean just that: it’s not about the hardware, but about acquiring talent, software, and a homegrown smartwatch platform. While “basic” activity trackers like Fitbits are in a better position than “smartwatches” right now, according to data from research firm IDC, Fitbit mentioned more than once a softening in demand for basic activity trackers on its recent third-quarter earnings call. Owning a smartwatch platform would help diversify Fitbit’s product lineup if it chooses to go further down the smartwatch path.

A buy also lets Fitbit essentially kill off the only competitor it can. Aside from Fitbit and Pebble, the top wearable makers come in at the very high end (Apple), very low end (Xiaomi), or specialized (Garmin). Buying those multi-billion dollar competitors is not an option for Fitbit. Buying Pebble is.

Image: Vjeran Pavic | The Verge

Lastly, the actual products the companies make are aligned in a bunch of ways. Both Fitbit and Pebble take a sparse, utilitarian approach to aesthetics — although Fitbit has made much more of an effort to design for women — and both have designed their wearables to last for five to seven days per battery charge. Both make their own on-device software and are agnostic when it comes to which smartphones they work with. Both share data freely with other third-party apps, although Fitbit has stubbornly refused to allow data-sharing with Apple Health or Google Fit software.

And Pebble in recent months has focused more on health and fitness tracking, after determining that health and fitness are the main draws for people interested in buying a smartwatch. The newest Pebble watches have built-in optical heart rate sensors, and the company made a big deal about the health-tracking algorithms it developed in collaboration with researchers at Stanford University. (Pebble is not alone in this thinking; Apple also doubled down on health and fitness tracking with its new, GPS-equipped, swim-ready Apple Watch Series 2.)

Pebble, which is led by founder and CEO Eric Migicovsky, first rose up in the wearables market in 2012 after running a record-breaking Kickstarter campaign for its original Pebble watch. The watch began shipping in 2014, and found a cult following in the early-adopter, tech-enthusiast crowd. In early 2015, Pebble said it had sold 1 million smartwatches — surpassing Android Wear numbers at the time — and was profitable.

But people familiar with the company’s inner-workings have said Pebble has been struggling for the past year. In March it said it was laying off 25 percent of its staff due to a lack of funds. Pebble has raised at least $15 million in venture capital funding to date, according to Crunchbase; that’s not counting the millions it has raised through its famed Kickstarter projects. In our review of its newest smartwatch, the Pebble 2, we found the heart rate tracking to be inaccurate, and the company’s Pebble Time 2 watch has been delayed, resulting in a series of complaints from early buyers on the Pebble Kickstarter page.

It may not be the desired ending for Pebble, which is said to have had early stage conversations with other potential acquirers before. But it may be the inevitable one.

Comments

Couple of months with Fenix3HR…..the rest is just a compromise.

totally agree

Can’t agree, but should in a year.

Bought a Fitbit Charge HR February of this year. It has nothing that I’d like to keep in my next activity tracker. It has terrible durability, it LOST features during a software update (the software that governs notifications became artificially limited so that calendar updates can instead be on the Charge 2), and to be honest, the social features are bunk. There’s no way for me to actually compete against a shadow-version of myself on a set trail, or to race a 5k across the world with a friend. And to top it all, it’s not water resistant.

I’ve already decided my next tracker is going to be a Fenix 3 HR or the next version of it.

I’ve already decided my next tracker is going to be a Fenix 3 HR or the next version of it.

You won’t be disappointed. It give me a feeling of Omega Moonwatch of activity tracker.
ps. About to race with it on an upcoming triathlon next month

Personally I don’t really see an issue with the exception of two things:

  1. Will I be forced to leave Activity tracking on
  2. Where the Hell is My Pebble Time 2

I have my Pebble 2. I need my Pebble Time 2. I don’t care about the brand, call it Pebble, Fitbit, whatever… I just care that in a few years time someone sells a nimble, useful, non-touchscreen e-paper smartwatch with a battery that lasts a week.

This is webOS all over again. Why do I fall in love with tech that is destined to fail?

I have a Pebble Time from last year. It’s great and does exactly what I need it to do.

My only two gripes are that the screen is a bit recessed and dim indoors and that it doesn’t have a HR monitor. I love the week long battery, and virtually all the notifications I could want.

I was considering a PT2 until this news, I don’t know I still might… though I was wondering why the PT2 was being so discounted.

Ugh. I really liked the idea of the Pebble. A relatively cheap, all around smartwatch with great battery life. Now we either have light fitness trackers with less functionality, or overly bloated smartwatches that last less than a day.

It’s too bad.

overly bloated smartwatches that last less than a day.

My Sony Smartwatch 3 will get me a full 2 days on a charge. It’s not the full week I used to get with my Fitbit Surge, but it does a lot of things better (and health tracking a lot worse).

I’ve found the Fitbit Blaze to be a very welcome improvement over the Surge. Especially with the recent software update that added a ton of notification options and some more watch faces. The battery life on it seems about a day or so less than the Surge. The only thing that’s less fun is the connected GPS system. My phone loves to kick it of part of the way into a trip, so I don’t always get all the full data. Because of that I occasionally switch back to the Surge for long outings. (even though it’s nowhere near as comfortable to wear)

Yeah, my Pebble Time gets 10 days – its in a different league really

Another option is the Garmin Vivoactive. I’ve had the non-hr version for about a year and I really like it. It tracks well, lasts about a week on a charge (or 10-12 hours with GPS tracking on) and does the main smartwatch-y things ( notifications, music control, etc.)

Ugh. I’m so frustrated by this whole thing. I moved from Fitbit to Pebble. My wife and I both with through several FitBit devices and didn’t like them, or their companion Android app.

Pebble fit the bill much better. Both the device and the companion app.

On top of that, Pebble integrates with both Apple Health and Google Fit. Fitbit is more tight-fisted with their customers’ data and refuses to integrate with those platforms, even with a significant number of users demanding it (Apple Health request, Google Fit request; both require login, sorry).

Maybe integrating too well with major competitors like Google and Apple is one of the reasons for Pebble’s failure. Make the users commit at least to using your service, like Fitbit. Apple and Google are using that data to better kill you with, in the marketplace ofc.

I still don’t understand the reasoning behind the focus on health tracking in smartwatches (or, hell, mobile in general). None of them can get very accurate data, the data they do get isn’t very actionable (walk more!), and the collection/analysis of that data doesn’t provide sustainable income to the companies (unless they want to become the first one to sell health data to 3rd parties. Hellooooooo lawsuit!)

But then again, that might just be the heart of the issue re: smartwatches. For the cool things they do, there’s no real need for having one. Adding health tracking into the mix feels like they’re tacking on a feature for the feature list in the effort to bring people in. But the recent downturn by Fitbit’s financials (with no corresponding glut of sales for Pebbles, Android Wears, or Apple Watches, not to mention Garmins, Jawbones, etc. etc.) reveals the dirty secret about fitness trackers: they’re not exactly sticky either. My wife and daughter both purchased Fitbit Altos back in April. Neither one wears them anymore. Fitness trackers at least get the benefit of people saying "oh, yeah, I want to be healthier" to get people to buy in (it isn’t until later that those customers realize that just wearing a Fitbit isn’t going to make 20 lbs. magically fall off).

I loved my Pebble Steel, and I just replaced it with a Pebble Time Steel a couple of days ago. But it’s pretty clear that the whole line is firmly entrenched in the "gadget" category. It’s not "must have", it’s "neat if you like it".

it isn’t until later that those customers realize that just wearing a Fitbit isn’t going to make 20 lbs. magically fall off

I did briefly pay a lot of attention to the metrics my Fitbit was providing, while also utilizing an app to track calorie intake, etc. It really does work. The problem is when you get out of the habit. Now I pop my Fitbit One into my pocket first thing in the morning, put it on my nightstand when I go to bed… and never look at my step total. Typing this I realize it’s probably been almost 3 months since I looked at the Fitbit app or gone to the webpage to see my metrics. I just never pull the thing out of my pocket to see the step total.. not sure why I carry it anymore.

Surprisingly the 20-30lbs I’d like to lose is not coming off by sporting a Fitbit in my pocket.. mine must be broke

Not going to lie it is pretty pointless. However I’ve had my Band since day one (in the UK) and my obsession really is just doing my steps… which I’ve set @ 10k per day. In the past 18 months or so, I’ve only had about 5 days total where I’ve not managed to complete it, and for that I’m very thankful!

What about Jawbone; couldn’t they have bought them?

Also, Pebble definitely had a nice smartwatch for ladies

It really stinks because I was 1 of the 66,000 backers for the Pebble Time 2 and it seems now we all just got screwed over. Pebble has not sent an update on the kickstarter page in over 2 months.

Expect better financial reporting from The Verge. Big difference between raising venture capital funds and Kickstarter. Kickstarter are purchases with no stake in the company. VCs are looking to get a return on investment.

Which is exactly why we split the two numbers out (VC funding, then crowdfunding) rather than lumping all funding together as some other publications have done.

While it’s great to see Pebble get the financial support it needs, I have little faith that Fitbit would preserve much of the magic of Pebble. I’ve had two Pebbles, plus various for family members, and really love it. It’s still the only smartwatch hardware which looks perfect in sunlight, and with a strong battery. I can’t imagine using anything else. Please… Pebble Time 2, 3, and beyond!

i see this making total sense. Pebble is the smart watch the people choose that want notifications and lasts a week. Fitbit has come of the best fitness tracking out there. combining makes sense. Fitbit can make better fitness oriented watches. and pebble gets to cash out. win-win

Hi Lauren — What do you mean by "to design for women"? Do you mean "to design beautiful objects with mass appeal" like what Apple does? Or do you mean "to make a pink or gold version" like what many businesses do?

I was about to get a new Pebble 2 (no HR thanks) and it was very difficult because I live in Argentina and costs rose exponentially. Local ‘importers’ sell the old Time for what’s equivalent to 375USD. I was trying to convince myself that I should switch to that even if it wasn’t the latest, but then this not-so-rumor started and I feel terrible.
Neither platform works that well and does what I need it to do as good and simple as Pebble.
It will be sorely missing.
I think I will have to keep my OG Pebble going on further into the future. Already replaced the band, with a generic one. And will have to do it again since the spare one also broke.

I hope my Time Round keeps working for another five years. Still the only nice looking smartwatch on the market.

Looks like Pebble will come out with an announcement for Kickstarters this week but I wonder why there is so little investigation from news sites like The Verge on this case? Do you know more than you can tell or is nobody interested in digging a little deeper? Cheers

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