Fitbit, the maker of popular fitness trackers, has acquired assets owned by rival Pebble, including key employees and intellectual property related to software and firmware development.
The deal, which was reported last week, closed on Tuesday, Fitbit announced on Wednesday. Amid slumping sales in the overall smartwatch market, Fitbit was interested in the PebbleOS, which has a large number of apps running on it and can be paired with both Apple’s iOS and Android.
"Pebble is no longer able to operate as an independent entity," Migicovsky wrote. "We have made the tough decision to shut down the company and no longer manufacture Pebble devices."
Pebble devices will continue to work, but "functionality or service quality may be reduced in the future," he added.
The deal, with terms not disclosed, will help Fitbit deliver new products, features, and functionality more quickly, the company said. The deal will also aid Fitbit's efforts to develop customized products and applications for customers, employers, and health providers, it said.
With the deal, Fitbit is "well positioned to accelerate the expansion of our platform and ecosystem to make Fitbit a vital part of daily life for a wider set of consumers, as well as build the tools healthcare providers, insurers, and employers need to more meaningfully integrate wearable technology into preventative and chronic care," CEO and co-founder James Park said in a press release.
The acquisition will also help Fitbit deliver products across mobile OSes. Pebble was a "trailblazer" by creating the largest open, agnostic connected device operating system, and it complements Fitbit's compatibility with more than 200 iOS, Android, and Windows Phone devices, the company said.
The smartwatch market saw an annual decline of units shipped by more than 51 percent in the third quarter, according to IDC. In the third quarter, sales of Pebble devices slumped by 54 percent to 100,000 units from 200,000 devices a year earlier, IDC said.
Fitbit, in early November, forecasted a modest 2 percent to 5 percent growth in sales in the fourth quarter.