So buying Pebble was nothing but their previous try at surviving in a challenging wearable market? It's really difficult to wrap my head around these two recent moves in a way that makes sense.
I've been acquired into a company that dumped 90% of employees six weeks later. (Acqui-fired) Either the group buying and the group firing didn't talk, or they just changed their minds right after. Kind of a bummer, our company made money and was just deleted as it got sucked into their black hole of failure. Spent a lot of time trying to reconcile the two events, sometimes there just is no larger plan to figure out
There's also the matter of how the acquisition was paid for: if you're a company at risk of going under, offering stock compensation is very, very cheap for you.
They bought the Pebble assets for <$40 million. The engineering knowledge and brand awareness was a steal and must-do, even for a struggling company. Remember, they still did $500 million in revenue in Q4.
Fitbit and the entire wearable industry is in a similar position to Pandora and Twitter. There's a massive need to re-adjust expectations.
You can build a very successful music streaming business, social communication company, and wearable manufacturing company... if you gauge the size of your market correctly. Guess wrong and Expenses > Revenues = panic (unless you've got Uber's pocketbook).
I think its pretty easy, Pebble adds some additional "watch" market, and if you lay off the people you've added more customers without adding a lot of additional cost.
Long before it was 'trendy' the monitoring your hearbeat etc market was there for serious athletes. That is, and continues to be a niche market. So there are too many players chasing too few customers who aren't going to upgrade their equipment every year and aren't willing to pay a monthly service charge for reading that equipment so the market seems quite a bit smaller than it once appeared.
They're probably planning to get acquired. Buying companies to increase their value, then laying off staff so they can keep the lights on until someone with more money comes along.
patmcguire|9 years ago
There's also the matter of how the acquisition was paid for: if you're a company at risk of going under, offering stock compensation is very, very cheap for you.
rubidium|9 years ago
Fitbit and the entire wearable industry is in a similar position to Pandora and Twitter. There's a massive need to re-adjust expectations.
You can build a very successful music streaming business, social communication company, and wearable manufacturing company... if you gauge the size of your market correctly. Guess wrong and Expenses > Revenues = panic (unless you've got Uber's pocketbook).
ChuckMcM|9 years ago
Long before it was 'trendy' the monitoring your hearbeat etc market was there for serious athletes. That is, and continues to be a niche market. So there are too many players chasing too few customers who aren't going to upgrade their equipment every year and aren't willing to pay a monthly service charge for reading that equipment so the market seems quite a bit smaller than it once appeared.
sundvor|9 years ago
Unless they actually launch a revised Time 2 under a different name, I'm flummoxed as to how they'll capture my interest.
mike-cardwell|9 years ago
dagurp|9 years ago