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Fitbit, the leader in the fitness band market, is near a deal to acquire smartwatch maker Pebble, according to three people briefed on the deal.
The price couldn’t be learned but it is thought to be for a small amount. Pebble had been looking to sell, one of the people said. There have been signs over the past year or so that Pebble was facing financial challenges. Earlier this year it reportedly laid off about a quarter of its workforce.
THE TAKEAWAY The expected sale of Pebble to Fitbit signals a consolidation in the wearables market.
The Pebble brand will be phased out after the deal. What Fitbit will get is Pebble's intellectual property, such as its operating system, one of the people said.
The deal signals a consolidation in the wearables space, which has been crowded with several players including Apple and Jawbone. Pebble burst onto the scene several years ago with a flashy Kickstarter campaign that drew interest from consumers. But it struggled to gain traction.
Pebble burst onto the scene several years ago with a flashy kickstarter campaign that drew interest from consumers. Fitbit, which went public last year, has had its own issues. Its stock price which has fallen from a peak of $49 in August of last year to roughly $8 today, giving it a market cap of $1.87 billion. The company recently reported net income fell 61% to $43.5 million in the nine months to Oct. 1, despite a 39% increase in revenue to $1.6 billion. Fitbit's main product is fitness bands but it sells what some have called a smartwatch, pitting it directly against Apple's watch.
Meanwhile, Jawbone, another maker of wearable devices, has also struggled in the past year or two and had looked for a buyer, without success.