Fitbit is said to be on the verge of closing a deal to buy smartwatch maker Pebble. The Information reports Fitbit will be acquiring the company for a “small amount,” and will be slowly phasing out both the smartwatch maker’s brand and its products over time.
TechCrunch reports Fitbit is paying $34-40 million for the company. That amount is around half of the $70 million Intel reportedly offered earlier in the year, and just a fraction of the $740 million luxury watch maker Citizen is said to have offered in 2015.
Fitbit is interested in acquiring the troubled smartwatch maker’s assets, including its software and other intellectual property. Pebble has run into financial troubles over the past year, and the company has been looking for a buyer. It was forced to layoff 25% of its staff in March.
Pebble has faced the same issues other smartwatch makers have, as an IDC report indicates the overall smartwatch market declined 51.6% in Q3 2016, and the lion’s share of that category is taken by Apple with its popular Apple Watch.
Company CEO Eric Migicovsky was quoted in February as saying the company was unfazed by the Apple Watch, as his company was less focused on apps than the Cupertino firm is. The firm introduced three new wearables — the Pebble 2, Pebble Time 2, and Pebble Core — in May of this year, financing the manufacturing of the new devices via the same Kickstarter route taken to debut their first smartwatch. The company has yet to ship Time 2 and Core units to those preorder customers.
Fitbit has also struggled recently, as the company’s shares fell 30% following less than impressive third-quarter results. The acquisition of Pebble could indicate the company is looking to expand its lineup beyond fitness-centric wearables, and perhaps make an entry into the traditional smartwatch market place. Fitbit’s latest devices offer notifications and other smartwatch-like features.