Fitbit's Pebble buyout valued at less than $40M, more about fighting Apple than product line

Posted:
in Apple Watch edited December 2016
New details about Fitbit's buyout of Pebble have emerged, namely that the deal is more about acquiring software and talent the company needs to fight Apple in the wearable arena, and less about the Pebble product line.




The deal, said to be less than $40 million, is valued below Pebble's existing debts and obligations, according to Bloomberg. Fitbit will not assume Pebble's debt, and is selling off the majority of the company's assets, including existing inventory and IT support equipment.

The vast majority of Pebble's products will be discontinued, including the Pebble 2 which recently started shipping to Kickstarter backers. The Time 2 and Pebble Core will be cancelled, and backers will be refunded.

Most of the company's employees will be out of a job as a result of the acquistion. Only 40 percent of the employee base has been offered a position at Fitbit's San Francisco headquarters -- the remainder will be let go outright, or offered a severance package.

Money from the sale will go primarily to Pebble's debt holders and main equity investors. Sources familiar with the matter say that the Pebble stock given to them is essentially worthless.

After a long head start, Fitbit appears to be on the losing end of its battle with Apple regarding wearable technology profits. A recent study regarding holiday season revenue suggests that the Apple Watch is reaping about half of the segment's revenue, similar to the dominance it holds with smartphone profits.

Fitbit's offerings are mostly less expensive than Apple's, with a less robust feature set than the Apple Watch.
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Comments

  • Reply 1 of 25
    lkrupplkrupp Posts: 10,557member
    More confusing and contradictory claims from the tech analyst realm. First we are told that Watch sales have plummeted by 71% and that Fitbit (deemed the Android of wearables) is destroying Apple in the wearable arena. Then Apple’s CEO comes forth to call BS on that. So Fitbit buys Pebble for next to nothing and it is claimed this was done to compete better with Apple who is supposedly being crushed by Fitbit. Once again the “market share” vs “profit share” argument comes into play. Apple is being destroyed in the wearable market yet is raking in the majority of the profits in said market. Do tech analysts have multiple personality disorders? Apple is simultaneously doomed and dominating? How does that work anyway?
    edited December 2016 albegarcjbdragonanantksundaramcyberzombiepscooter63Rayz2016radarthekatwatto_cobrajony0
  • Reply 2 of 25
    calicali Posts: 3,494member
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
  • Reply 3 of 25
    brucemcbrucemc Posts: 1,541member
    lkrupp said:
    More confusing and contradictory claims from the tech analyst realm. First we are told that Watch sales have plummeted by 71% and that Fitbit (deemed the Android of wearables) is destroying Apple in the wearable arena. Then Apple’s CEO comes forth to call BS on that. So Fitbit buys Pebble for next to nothing and it is claimed this was done to compete better with Apple who is supposedly being crushed by Fitbit. Once again the “market share” vs “profit share” argument comes into play. Apple is being destroyed in the wearable market yet is raking in the majority of the profits in said market. Do tech analysts have multiple personality disorders? Apple is simultaneously doomed and dominating? How does that work anyway?
    For the analysts which put out these 'public' reports, which are meant to be regurgitated by the tech media ad nauseam, there is only one goal - get as many clicks as possible.  It is hard to say whether they have any specific agenda against Apple per se - the driving factor is that they know (or have helped create) that stories about Apple get those clicks.  Not much of a strategy or agenda beyond that.


    edited December 2016 jbdragonstanthemanradarthekat
  • Reply 4 of 25
    Mike WuertheleMike Wuerthele Posts: 6,919administrator
    lkrupp said:
    Apple is simultaneously doomed and dominating? How does that work anyway?
    The same way its worked since the iPod took hold, I guess.
    jbdragonanantksundaramradarthekatwatto_cobra
  • Reply 5 of 25
    What's up with these aggressive, loud adverts??? I'm about to stop coming to this site.
  • Reply 6 of 25
    cali said:
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
    “Buy a great company at a fair price, rather than a fair company at a great price.” - Warren Buffett / Berkshire Hathaway.

    radarthekat
  • Reply 7 of 25
    Why is this considered "more about fighting Apple..." when there are plenty of other Android wearable companies being directly challenged? It's mainly (iOS) iPhone users who are buying AppleWatches so they're already part of the Apple fold. In addition, over a year ago, I thought the Pebble watch was also considered to be a challenger to AppleWatch and we can all see how poorly that turned out to be. Unfortunately for Apple shareholders, the analysts can always turn to some random market share percentage charts to frighten off potential Apple investors no matter how well a certain Apple product is selling. Since analysts and pundits don't actually have any solid numbers about AppleWatch sales, they'll just continue to make them up to favor AppleWatch rivals.
  • Reply 8 of 25
    calicali Posts: 3,494member
    cali said:
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
    “Buy a great company at a fair price, rather than a fair company at a great price.” - Warren Buffett / Berkshire Hathaway.

    Except Pebble was a good company at a cheap price.
  • Reply 9 of 25
    jdgazjdgaz Posts: 405member
    lkrupp said:
    More confusing and contradictory claims from the tech analyst realm. First we are told that Watch sales have plummeted by 71% and that Fitbit (deemed the Android of wearables) is destroying Apple in the wearable arena. Then Apple’s CEO comes forth to call BS on that. So Fitbit buys Pebble for next to nothing and it is claimed this was done to compete better with Apple who is supposedly being crushed by Fitbit. Once again the “market share” vs “profit share” argument comes into play. Apple is being destroyed in the wearable market yet is raking in the majority of the profits in said market. Do tech analysts have multiple personality disorders? Apple is simultaneously doomed and dominating? How does that work anyway?
    As the saying goes, you can make statistics say whatever you want.
  • Reply 10 of 25
    calicali Posts: 3,494member
    Why is this considered "more about fighting Apple..." when there are plenty of other Android wearable companies being directly challenged? It's mainly (iOS) iPhone users who are buying AppleWatches so they're already part of the Apple fold. In addition, over a year ago, I thought the Pebble watch was also considered to be a challenger to AppleWatch and we can all see how poorly that turned out to be. Unfortunately for Apple shareholders, the analysts can always turn to some random market share percentage charts to frighten off potential Apple investors no matter how well a certain Apple product is selling. Since analysts and pundits don't actually have any solid numbers about AppleWatch sales, they'll just continue to make them up to favor AppleWatch rivals.
    Android wear is dead. Pebble had a better chance than them.

    Pebble WAS a challenger but Apple/Fitbit pushed them out.

    Just like Apple has different rivals in every market, they will in the Watch industry and it won't be android.
    peterhartHerbivore2
  • Reply 11 of 25
    eightzeroeightzero Posts: 3,134member
    $40M. Count to 5: thousand 1, thousand 2, thousand 3, thousand 4, thousand 5. There. AAPL just made $40M 

    No one wins here. When I first saw the pebble, it looked mostly like a garage tinkerers project. But then, so did Apple. I'm sure someone in a business school somewhere will use this as a case study. Maybe put in the textbook for TrumpU. 
    cyberzombieradarthekat
  • Reply 12 of 25
    linkmanlinkman Posts: 1,046member
    The Pebble Kickstarter page is full of comments from enraged, fuming, and flaming backers spouting plenty of obscenities! https://www.kickstarter.com/projects/597507018/pebble-2-time-2-and-core-an-entirely-new-3g-ultra/posts/1752929
    radarthekat
  • Reply 13 of 25
    What's up with these aggressive, loud adverts??? I'm about to stop coming to this site.
    One word: Ghostery.
    pscooter63
  • Reply 14 of 25

    jdgaz said:
    lkrupp said:
    More confusing and contradictory claims from the tech analyst realm. First we are told that Watch sales have plummeted by 71% and that Fitbit (deemed the Android of wearables) is destroying Apple in the wearable arena. Then Apple’s CEO comes forth to call BS on that. So Fitbit buys Pebble for next to nothing and it is claimed this was done to compete better with Apple who is supposedly being crushed by Fitbit. Once again the “market share” vs “profit share” argument comes into play. Apple is being destroyed in the wearable market yet is raking in the majority of the profits in said market. Do tech analysts have multiple personality disorders? Apple is simultaneously doomed and dominating? How does that work anyway?
    As the saying goes, you can make statistics say whatever you want.
    That saying is wrong 62% of the time.
    command_fradarthekat
  • Reply 15 of 25
    What's up with these aggressive, loud adverts??? I'm about to stop coming to this site.
    One word: Ghostery.
    Plus AdBlock, NoScript, BetterPrivacy. Firefox required for NoScript (unless it changed recently, it's the only browser that allows the hooking in required to whitelist/blacklist JavaScript).
  • Reply 16 of 25
    thedbathedba Posts: 776member
    jdgaz said:
    lkrupp said:
    More confusing and contradictory claims from the tech analyst realm. First we are told that Watch sales have plummeted by 71% and that Fitbit (deemed the Android of wearables) is destroying Apple in the wearable arena. Then Apple’s CEO comes forth to call BS on that. So Fitbit buys Pebble for next to nothing and it is claimed this was done to compete better with Apple who is supposedly being crushed by Fitbit. Once again the “market share” vs “profit share” argument comes into play. Apple is being destroyed in the wearable market yet is raking in the majority of the profits in said market. Do tech analysts have multiple personality disorders? Apple is simultaneously doomed and dominating? How does that work anyway?
    As the saying goes, you can make statistics say whatever you want.
    Statistics by themselves don't lie. The cherry picking of favorable to whomever is paying you statistics on the other hand, most often do lie.
  • Reply 17 of 25
    cali said:
    cali said:
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
    “Buy a great company at a fair price, rather than a fair company at a great price.” - Warren Buffett / Berkshire Hathaway.

    Except Pebble was a good company at a cheap price.
    Apparently Pebble management didn't think it was a good company since they sold it without even covering their debts.  That sounds like the actions of a company trying to avoid bankruptcy. 
    radarthekat
  • Reply 18 of 25
    boltsfan17boltsfan17 Posts: 2,294member
    linkman said:
    The Pebble Kickstarter page is full of comments from enraged, fuming, and flaming backers spouting plenty of obscenities! https://www.kickstarter.com/projects/597507018/pebble-2-time-2-and-core-an-entirely-new-3g-ultra/posts/1752929
    Those people complaining are morons. Pebble has a lot of debt. They were on their way to shutting down. Silly that a lot of people think they deserve a refund. 
    radarthekat
  • Reply 19 of 25
    boltsfan17boltsfan17 Posts: 2,294member
    cali said:
    cali said:
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
    “Buy a great company at a fair price, rather than a fair company at a great price.” - Warren Buffett / Berkshire Hathaway.

    Except Pebble was a good company at a cheap price.
    Apparently Pebble management didn't think it was a good company since they sold it without even covering their debts.  That sounds like the actions of a company trying to avoid bankruptcy. 
    They should have accepted the offer from Citizen last year. Rumors say the offer was for $740 million. 
  • Reply 20 of 25
    eightzeroeightzero Posts: 3,134member
    cali said:
    cali said:
    Funny stuff.

    though I wonder why Apple doesn't pick up cheap companies. Maybe Apple doesn't need any of their talent.
    “Buy a great company at a fair price, rather than a fair company at a great price.” - Warren Buffett / Berkshire Hathaway.

    Except Pebble was a good company at a cheap price.
    Apparently Pebble management didn't think it was a good company since they sold it without even covering their debts.  That sounds like the actions of a company trying to avoid bankruptcy. 
    They should have accepted the offer from Citizen last year. Rumors say the offer was for $740 million. 
    And then all of Citizen would now be for sale for $40M.
    watto_cobra
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