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Fitbit Is Buying Smartwatch Maker Pebble For Around $40 Million, Says Report (techcrunch.com) 94

According to a report from The Information, Fitbit is buying smartwatch maker Pebble for a "small amount" of money. One source says Fitbit is paying between $34 and $40 million for the company and is "barely covering their debts." TechCrunch reports: A source close to the company told TechCrunch that watch maker Citizen was interested in purchasing Pebble for $740 million in 2015. This deal failed and before the launch of the Pebble 2 Intel made an offer for $70 million. The CEO, Eric Migicovsky refused both offers. Pebble released the newest version of its smartwatch in October, but the past year or so has been a challenging period. It laid off 25 percent of its staff in March, while we reported last year that it was in some trouble and had turned to debt funding and loans, as well as traditional investor cash, "in order to stay afloat." Earlier this year, Pebble CEO Migicovsky confirmed that his company had raised $28 million in debt and venture financing. He blamed a more cautious outlook from VCs focused on tech as the primary reason for letting 40 of Pebble's staff go.
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Fitbit Is Buying Smartwatch Maker Pebble For Around $40 Million, Says Report

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  • Pebble has always been the best looking of among all the others in the niche, while offering the least functionality. Fitbit could have saved even more money by just hiring away Pebble's design team at triple their salaries. Pebble is set to tank in moments as is, and Fitbit would have grabbed all their users on the upgrade cycle (which for gadgets like this is every 18-24 months).
    • now they get their design patents as well

    • by Anonymous Coward

      are you kidding? the pebbles were ugly as sin and at least the early versions were plagued by display problems that the company tried to sweep under the rug.

  • Should have sold themselves in 2015 when the hype for smart watches was at its greatest and the buyers remorse was at its lowest.
  • by goose-incarnated ( 1145029 ) on Thursday December 01, 2016 @09:30AM (#53400849) Journal

    He blamed a more cautious outlook from VCs focused on tech as the primary reason for letting 40 of Pebble's staff go.

    In what universe is this quote acceptable?

    This man appears to believe that businesses get money from VCs and pays money to employees+suppliers. Last I checked, businesses got money from customers. They'd get /loans/ from banks (but that has to be paid back).

    The problem with a lot of SV/Tech startups is that the people involved appear to believe that their income comes from VCs. Their business plan is effectively "Get VC Money, Then Sell Company!"

    A depressed market would soon separate the wheat from the chaff.

    • by Dragonslicer ( 991472 ) on Thursday December 01, 2016 @10:40AM (#53401251)

      The problem with a lot of SV/Tech startups is that the people involved appear to believe that their income comes from VCs. Their business plan is effectively "Get VC Money, Then Sell Company!"

      It's hard to tell for sure, but you seem kind of surprised by this. If so, you must be pretty young, since this has been true for almost 20 years now.

    • This man appears to believe that businesses get money from VCs and pays money to employees+suppliers. Last I checked, businesses got money from customers.

      In Silicon Valley, VC's are your customers. :-)

  • by Anonymous Coward

    I really like both of my Pebbles. Don't really want a fitness band, do want a watch.

    • Me and you both mate.
      • Me and you both mate.

        Well it's a free world, but don't expect me to watch.

    • by wwphx ( 225607 )
      I absolutely love my Time Steel, I just hope I get my Time Steel 2 at some point! I was concerned with the Kickstarter when I learned that the 2 wasn't fully developed yet, now I'm VERY concerned.

      I bought the Time Steel via the Kickstarter after I had cataract surgery and was sick and tired of pulling my iPhone out to see what time it was. My Steel is awesome: alarm clock with vibrating alarm, count-down timer, AND I CAN READ IT WITHOUT MY GLASSES. The Time 2 series: my interest was the larger display
  • Sue the CEO (Score:4, Insightful)

    by ghoul ( 157158 ) on Thursday December 01, 2016 @09:40AM (#53400901)

    CEOs justify their huge salaries saying that their decisions have multi-million dollar affects on a company. Well in this case the CEO gave up a 740 million deal and has to settle for a 40 million dollar deal so he lost 700 million for the company. The employees should sue him in a personal capacity for everything's hes got.

    • Not sure about Pebble specifically, but CEOs at VC funded companies typically don't have high salaries. Usually the top engineers and salespeople make more than the CEO. The CEO's compensation is delayed in the form of equity, which only turns into cash after an acquisition or other liquidity event. In this case, taking the $740MM would have resulted in a nice payday for the CEO. $40MM probably didn't even get the investors/debtors their money back.

      Public company and profitable private company CEOs are almo

      • by ghoul ( 157158 )

        So the people whose decisions can actually make or break a company are not and the folks who got the post because they are buddies with the board and couldnt screw up even if they tried get paid the big bucks. Ah Crony Capitalism. It smells like fresh fields in the morning - full of manure.

    • by Tx ( 96709 )

      The summary said the deal failed, it didn't say that was down to Pebble's CEO. It may be that Citizen realised Pebble was way overvalued and backed out. Unless you have information from elsewhere of course, I'm only going on what's written here.

      • by Desler ( 1608317 )

        The full story says the CEO declined the offers.

        The CEO, Eric Migicovsky refused both offers.

        • by Tx ( 96709 )

          Lol, I read TFA literally to the sentence before that bit, doh. Well, hopefully Eric Migicovsky will be feeling even dumber than I do.

  • mixed emotions (Score:4, Informative)

    by epine ( 68316 ) on Thursday December 01, 2016 @10:44AM (#53401267)

    I purchased two Pebble watches as part of the original Kickstarter. One failed within a year (we were too distracted at the time to pursue a warranty claim), the other one is still "ticking".

    Custom programming my own non-24-hour sleep-wake calendar was a big step for me in finding a cure. It finally put my metabolic reality on equal footing with the world around me, so that I could properly track each on its own terms.

    I will always remember my Pebble watch as a life-changing event.

    That said, I had doubts about Eric Migicovsky as a venture capitalist right from the beginning. When the original watch was delayed (I've done electronics fabrication before, it's far from easy with so much at stake on a new product) Eric obviously got some advice to keep reality close to the vest, and thus his public comments fell far short of the mark, given the situation. It's actually a flaw in the Kickstarter program that your promised delivery date is locked in stone prior to discovering you've got a landslide on your hands. (How to manage around that, I've never quite figured out. Kickstarter mainly appeals to flighty dreamers—too much honesty could seriously damp the lemming effect.) For my money, Eric failed the test of knowing when and where to draw the line on taking good advice. Any damn fool can advise you to keep your PR powder dry. Actual VC talent is required to know when to blow these damn fools off and venture out into the dangerous territory of actual honesty, while your users still care.

    As for the watch itself, I'm still actually using my Pebble watch, for a single reason. Cure now in hand, in bottle form, I continue to wear my watch because its vibrate alarm is harder for me to ignore or forget than any other watch/phone I've had before, so I really do take my sustained-release melatonin at exactly the right time of day, each and every day, without fail.

    I turned off BT completely after Fitness App Runkeeper Secretly Tracks Users At All Times, Sends Data to Advertisers [slashdot.org] because at this level of vigilance investment, extra battery life on both sides was more important than e-mail notification (and I hate pulling out my phone just to check a quick message).

    Sad.

    • Can you give a brief description of what you did to solve your sleep-wake cycle?

      I'm very interested in this sort of thing, as it borders on some of my areas of research.

    • It's actually a flaw in the Kickstarter program that your promised delivery date is locked in stone prior to discovering you've got a landslide on your hands. (How to manage around that, I've never quite figured out. Kickstarter mainly appeals to flighty dreamers—too much honesty could seriously damp the lemming effect.)

      In KSs that I have gone in on, it was done by having the rewards in "waves". Wave 1 is the basic reward shipping on Jan 1 with 1000 offered. Wave 2 is the basic reward shipping on Feb 1 with 1000 offered. Wave 3 ships on Mar 1, etc. They can always add more "waves" as more people sign up and they can always ship early if they can manage it. People that have backed can manage to change their pledge to an earlier wave if they keep and eye out for vacancies as people change pledges or drop out. Of course, you

    • by bongey ( 974911 )

      Pebble Time 2 is still available for pre-order https://www.pebble.com/new [pebble.com] . Seems this might be FUD by fitbit or trying to lower the price of buying pebble out.

  • by Coopjust ( 872796 ) on Thursday December 01, 2016 @11:20AM (#53401479)
    Numerous articles are now reporting that the Pebble brand will be phased out. Given Fitbit's history of buyouts (e.g. their acquisition of Coin earlier this year was a technology buyout, and they left everyone who bought the Coin 2.0 payment hardware SOL) I believe that Fitbit is going to drop support/development of the Pebble hardware. And my Pebble Time 2 (bought earlier this year via Kickstarter) is late, and probably deprecated before I receive it.

    My Pebble Time Steel - other than the giant bezel - is my ideal smartwatch. Great battery life, intuitive controls, looks nice, price was right, battery life means I don't have to charge it daily (sometimes as little as once a week, with a lot of notifications). I thought that Pebble Time 2 would solve my main gripe. But with the buyout, I'm probably going to cancel my order. Why buy into something that's going to be dead from a development perspective before I get it?
    • by kwalker ( 1383 )

      I'm upset by this news as well, but considering the other stories about the bottom falling out of the smart-watch market, I'm not surprised.

      I backed the Pebble Time KS and I've worn it daily since I got it. I even wear it at night after the release of Pebble Health for the sleep tracking. I love it. I love the screen (Even though it's only 64-colors, it can be read in bright sun and complete darkness with the backlight). I love that it's waterproof (I've had it in pools and the ocean). I love that with my n

      • by phorm ( 591458 )

        now the company is being bought by a company that likes to kill its purchases.

        I'm wondering what (if any) their obligations are towards existing backers of the PT2 if they're buying out Pebble...

        • by kwalker ( 1383 )

          I doubt the deal would close before the PT2 is supposed to ship (Last week), so I don't think they (Fitbit) have any obligation. However Pebble should still fulfill their KS backers' orders. But there's no guarantee with KS orders, so they may just refund orders. I'm hoping not though. I still want the watch.

          • by phorm ( 591458 )

            There's no guarantee, indeed, but a company can still be in trouble if it's found they were deceptive or mis-used funds. In this case though they also promised refunds to anyone who asks before shipping, so I guess we'll see.

            There's a lot of hate on the Pebble KS right now, with people ranting about how they "ruined Xmas", which IMHO is pretty extreme and overall quite pathetic. I'd say even without the acquisition or other issues, expecting a KS to ship out fully by an exact date is pretty wishful thinking

  • I don't see an actual press release from either company. Is this just more fake news, like "renaming" Alpha Centauri?
  • No one has confirmed this, I wouldn't be surprised if it is FUD from Fitbit to hurt Pebble sales. There is no real reason for pebble to sell at this point in time.

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