The encyclopedia · Product & Design · Strategic decision · 2016
Pebble invented the smartwatch category — then got outspent by Apple and Fitbit
Pebble's 2012 Kickstarter raised $10M and created the smartwatch category. Apple Watch launched in 2015. Pebble was sold to Fitbit in 2016 and shut down.
Pebble Technology · 2016-12
What happened
Pebble, founded by Eric Migicovsky, launched on Kickstarter in 2012 and raised $10.2 million — then the most-funded Kickstarter project ever. The Pebble smartwatch, with its e-paper display, week-long battery life and open SDK, created the smartwatch category and proved there was a market for a watch that connected to your phone.
But Pebble was a small startup competing against Apple, Samsung and Google. When the Apple Watch launched in 2015, it brought massive marketing, a polished ecosystem and brand cachet that Pebble could not match. Pebble's second Kickstarter (Pebble Time) raised $20M, but the company struggled with manufacturing delays and competition.
In December 2016, Pebble was sold to Fitbit for approximately $23 million — a fraction of what the company had raised. Fitbit shut down Pebble's servers and discontinued the brand. The case illustrated how a startup can create a category and then be crushed by the giants who enter it with more resources, and how being first does not guarantee being last.
Why it happened
- Pebble created the smartwatch category but could not compete with Apple, Samsung and Google's resources.
- The Apple Watch's 2015 launch brought massive marketing and ecosystem integration that Pebble could not match.
- Pebble struggled with manufacturing delays and quality issues as it scaled.
- The company was sold to Fitbit for ~$23M, and the brand was discontinued.
The lesson
Creating a category doesn't guarantee owning it. Pebble proved smartwatches existed, then Apple took the market. First doesn't mean last.
Aftermath
Pebble was sold to Fitbit in 2016 and the brand was discontinued. Fitbit was later acquired by Google. Pebble's open-source firmware lives on in community projects. The case is cited as an example of how category creators can be displaced by category dominators.
Sources
- TechCrunch — 'Fitbit reveals it paid $23 million to acquire Pebble's assets', 22 February 2017
- The Verge — 'Fitbit formally announces that it is buying smartwatch maker Pebble', 7 December 2016
- Pebble (watch) — Wikipedia (Kickstarter, Fitbit acquisition)
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