Tech

Fitbit Paid $23 Million To Acquire Pebble’s Assets

By Monica U Santos , Feb 24, 2017 02:00 AM EST
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Initially, reports claimed that Fitbit would be paying out between the range of $34 million and $40 million to acquire Pebble's assets. This includes the acquisition of software as well as the talent to fight with the most dominant smartwatch in the wearable device market, the Apple Watch. The report also said that only 40 percent of the total employees of Pebble were offered positions at Fitbit's headquarters in San Francisco.

Fitbit Paid $23 Million To Acquire Pebble

The purchase price, which is said to be $23 million, may be considered too low to acquire Pebble's assets especially its smartwatch line. Pebble's watches are considered as one of the first examples of the product category to obtain a level of popularity with buyers. According to AppleInsider, the $23 million price is approximately the same as the funds raised in both of Pebble's Kickstarter campaigns.

As Fitbit revealed its quarterly figures ending in December, the company's revenue dropped year-on-year from a total of $711.6 million to $573.8 million, with the net profit of $64.2 million at the end of the year 2015. It has turned into a net loss of an approximately $146 million for the quarter. For the whole year of 2016, Fitbit's revenue of $2.17 billion is up from the $1.86 billion which was achieved in 2005, but heavy costs dragged down the net profit of $175.7 million from 2015 to a $102.8 million net loss.

Fitbit Will Focus On Health And Fitness

“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch," James Park a Korean American tech entrepreneur and co-founder of Fitbit said. In an interview, Park said that the company can provide people stylish and well-designed devices that are able to combine the right general purpose functionality of a smartwatch. Fitbit wants to focus not just on developing a wearable tech but also with a focus on health as well as fitness.

According to TechCrunch, Fitbit’s latest products such as the Charge 2, Alta, Blaze and Flex 2, are all accounted for 96 percent of its revenue. The company also managed to increase active smartwatch users from 16.9 million to a total of 23.2 million year-over-year, despite the fact that the wearable industry suffered from some major growing worries. “With the recent acquisition of assets from Pebble, we are taking action to position the company for long-term success,” Park added.

 

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