One of the most notable acquisitions that were done in 2016 was that of Pebble getting acquired by Fitbit. The two wearable companies came together in December last year and since then has faced many queries regarding the intimates of the deal, but has never disclosed them before. However, the wearable company has now disclosed their earnings finally.
Fitbit declared that it had spent a mere 23 million US dollars in the acquisition of Pebble. This was an alarming amount. When the deal was finalised, the tech world had estimated purchase costs to be around $34 million and $40 million. This deal being so cheap had its own reasons. The two wearable makers had been at loggerheads for a long time and with Fitbit overpowering Pebble’s line of smartwatches, the competition at one point became really tense. But the second move advantage taken by Fitbit ultimately led Pebble to merge with its rival, and that too at a throw away price.
Apparently, putting an end to Pebble’s struggles in running the business did not do fitbit much good. The company has seen unsatisfactory sales figures in the last few months. The sale during the holiday season was particularly bad – the number of units sold was estimated to be just 6.5 million. The expectation was much higher because of this acquisition. a 19 percent fall was seen in the last quarter alone. However, experts have ascertained that over the year, the sales have increased by 17%, so the last quarter might not have hurt that bad. It nevertheless lost around $103 million in the full year, even though it adopted a good marketing strategy to boost sales. Perhaps giving discounts or even increasing prices did not do much good. Sales have since then been in the bad seas, but it is still trying its best to improve on the sales scores.