Fitbit has decided to acquire Pebble and there is nothing new when it comes to this purchase decision. However, what is now is the fact that Fitbit actually paid a much lower sum of money than what was initially reported. Fitbit actually took over Pebble at the end of 2016. The company has only revealed now the final acquisition price.
So, when the purchase was initially revealed back in December 2016 it has been claimed that Fitbit was going to pay between $34 and $40 million for Pebble. Well, it appears that the rumors were not true as Fitbit paid only $23 million for the purchase. The revelation was made in the quarterly report earnings revealed by the famous company. The whole deal between the two is quite curious, as with this purchase what Fitbit did was actually removing a rival from the market.
So, after the purchase, Fitbit decided to terminate the line of smartwatches that Pebble produced. These products were in direct competition with the devices released by Fitbit. On the other hand, from Pebble’s side, the purchase is not that shocking. Actually, Pebble had been dealing with some issues for quite some time. This made numerous specialists believe that Pebble sold for less than what it was initially reported. However, such a low sum, $23 million, was surely not expected.
Well, despite the purchase, things are not looking that well for Fitbit, either. Actually, the holiday sales weren’t what the company expected and Fitbit went to report a decline of its earnings from this period of the year. The company only managed to sell 6.5 million devices during the October – December period. A year earlier, Fitbit definitely did better, as the company managed to sell no less than 8.2 million devices during the same period of time.
And that may not be all. Fitbit also recently announced its plans to lay off no less than 110 employees. Apparently, this is the company’s strategy to reduce costs and be more focused and efficient. Well, maybe a lower financial performance is after all what the company expects, as Fitbit reported that it has projected revenues to drop between $1.5 and $1.7 billion in 2017.