Pebble's Demise May Stymie Innovation

The news that Pebble ceased operations, sold the company’s technology to Fitbit, and let some personnel go was disappointing. It was disappointing not just for those employees and the legions of dedicated customers and developers left behind (including those who supported the company’s products), but for the wider wearable device market, too. 

When Pebble launched its first Kickstarter campaign in 2012, it excited a new market for relatively low-cost smartwatches. The promise of a device able to display and exchange data with smartphones, as well as operate without quickly draining its battery, won record breaking support for the device (US$10 million in 30 days) and helped put both startups on the map. Earlier in 2016 after expanding its smart watch range, the company returned to the crowdfunding website to garner interest and investment for its latest planned products. This time more than US$12.7 million was raised but it did not prove enough to see those products through to production, and investors are faced with potentially losing the money they paid up front. The three planned products comprised of two second generation smart watches and a completely new device, the Pebble Core.

The Core was a small square device with cellular connectivity but no screen. Running Android, it was set to be, in essence, a tiny, hackable, connected Android computer with a button that can be programmed to deliver a range of functions. The device would offer tracking and a multitude of additional services through a headphone/mic port and cloud connectivity to Amazon’s Alexa voice control platform—all without dependence upon the presence of a smartphone. ABI Research weighed in on the potential of the Core when it was announced previously. For more information, please see ABI Research’s Insight, “Pebble Core is a Bold Step in Wearables” (IN-4145).

It was not just smartwatch competition from rivals such as Apple, Samsung, and others with significantly larger and deeper pockets that stymied Pebble. The category itself took longer to move into the mainstream than other consumer devices such as smartphones or tablets. That fact that Pebble went to Fitbit is an interesting development. Fitbit has a similar status in the activity band market that Pebble always strived for. As an early entrant in its own space, Fitbit managed to make its devices synonymous with activity tracking ahead of major rival engagement in the market.

However, smartwatches and activity trackers are two markets on a collision course. Smartwatches increasingly eat into the activity tracker market by offering the same activity tracking capabilities alongside traditional smartwatch features. Fossil pushed smartwatch capabilities into a wide range of its offerings since acquiring activity tracker company, Misfit, while Apple is highlighting activity tracking in its Apple Watch 2. For its part, Fitbit launched its own smartwatch, the Blaze, at the start of 2016. Meanwhile, activity tracking is not just going into smartwatches but also into clothing and other form factors.

There is a trend leading not away from smartwatch or activity tracker functionality, but away from embedding them in wrist worn devices. Over the next 5 years, the potential to embed activity tracking and to relay smartphone messages will increasingly extend to the range of other wearable device formats, such as glasses and headsets.

Pebble’s demise was certainly driven by its position as a small startup having to compete in a market against larger players with greater resources. It also suffered from the limited appeal of smartwatches, which has so far proved to be a drag on broad market acceptance. But, for those still within the smartwatch market, deep pockets and a commitment to developing smartwatch offerings may still not be enough to drive the kind of adoption that smartphones and tablets delivered.

Sadly, Pebble folded before it had a chance to bring its planned Core device to market. That small fob-like device offered the effort to move away from the wrist worn factor and brought some a new wave of innovation to market. The demise of Pebble would seem to signal an end to the ability of the Core or a Core-type product to reaching the market, unless Fitbit can share that vision.