Even as the wearables space is on track for its largest funding raising year ever, both Fitbit and Pebble, two of the best known wearable brands, have been struggling. Now it looks like they may be combining forces.
Fitbit is in advanced talks to acquire Pebble, according to a report from the Information on Wednesday. While no financial terms of the deal are known at this time, the report says the deal would be worth "a small amount."
Fitbit is also said to be interested in Pebble's technology, including its intellectual property and software, rather than the Pebble brand, which would be phased out over time.
Pebble is notable for having the most funded Kickstarter campaign ever: the Pebble Smartwatch, which raised $20.3 million from 78,471 backers. In fact, it also holds the number three spot on that list also, with its Pebble 2 Watch, which raised $12.8 million from 66,673 backers in 2015, as well as number four, with its Pebble E-Paper Watch having raised $10.3 million from 68,929 backers in 2010
Despite those big raises, Pebble has failed to keep up with the competition, most notably from the Apple Watch. As of last year, the company had only sold 1 million devices. By contrast, there were 17 million smartwatches bought in 2015, and more than 50 percent of them were Apple Watches.
In March, Pebble was forced to lay off a quarter of its staff, or 40 employees.
Fitbit, meanwhile, has seen its own struggles this year, specifically in terms of its stock performance. The company went public last year in what was said to be the best IPO of 2015. Fitbit raised $731 million in IPO, to be valued at $3.4 billion, more than 10 times its $300 million valuation after raising $84 million in venture capital.
Fitbit was also the largest wearables IPO ever, beating out GoPro, which exited at a valuation of $3.1 billion in 2013.
The company went public at $20 a share, and has since seen its stock tank; it was hit especially hard earlier this month when it missed its revenue target in Q3, while also lowering its outlook, causing it to drop below $10 for the first time ever.
As of the end of trading on Wednesday, it's stock price was $8.36 a share, down 71.75 percent year-to-date.
Fitbit also had to spend a good part of the year fending off lawsuits from rival Jawbone, with accusations of stealing trade secrets and patents, both of which Fitbit was able to win.
The problems these two companies are having could be due to competition, or they could simply be due to a lack of interest by the general public.
A report from IDC in October showed the smartwatch market having a share year-over-year decline in shipment volumes in Q3. Total smartwatch volumes reached 2.7 million units shipped in the quarter, a decrease of 51.6 percent from the 5.6 million units shipped in the the third quarter of 2015.
If it is the case that public interest in smartwatches is declining, then it's hard to see how combining Fitbit and Pebble would help.
A spokesperson for Fitbit declined to comment on the report.
VatorNews also reached out to Pebble for confirmation and more details. We will update this story if we learn more.
(Image source: kickstarter.com)