The Pebble Time 2 and Pebble Core could be canceled, thanks to Fitbit’s pending acquisition of Pebble. Fitbit is closing in on its plan to buy Pebble, says Bloomberg, describing the rumored deal as “imminent.”

Pebble Time 2
Image: Flickr

Pebble Time 2 will be canceled

Fitbit, the leading manufacturer of smart wearables, has reportedly employed 40% of Pebble’s staff, and most of them are software engineers. Fitbit can utilize Pebble’s software assets like the operating system on Pebble’s existing device. Fitbit will acquire Pebble for under $40 million, primarily due to Pebble’s debts and other obligations, which is more than the purchase price.

Apparently Fitbit will not take in any hardware designed by Pebble, including both current and future Pebble products.

“The rest of Pebble’s assets, including product inventory and server equipment, will be sold off separately,” Bloomberg said, citing sources familiar with the development.

Pebble will have to cancel its Pebble Time 2 and Pebble Core devices, and they won’t be shipped to Kickstarter backers and preorder customers. Every customer who supported the product through crowdfunding will get their money back.

The Pebble Time 2, which reportedly packs a more premium experience than the company’s previous wearables, started shipping a week ago, and it is now available in various stores. The Pebble Core would have been the company’s first non-watch gadget — a small device with built-in GPS. However, both products are now reportedly scrapped, even though the Kickstarter campaign raised nearly $13 million in order to fund the project, notes The Verge.

Fitbit to maintain lead over smartwatches

Pebble has not yet displayed these cancellations on its website, probably because Fitbit has yet to officially confirm its purchase of Pebble purchase. Once Fitbit makes the official announcement, Pebble CEO Eric Migicovsky will resign. Migicovsky will more likely return to Y Combinator where he is expected to focus on “advising early-stage companies on hardware development,” according to Bloomberg. Other Pebble employees who will not be absorbed by Fitbit will be given severance packages.

Meanwhile, Fitbit continued to outperform other smartwatch makers during the fall quarter, surging 3.1% to 23 million shipments, whereas the smartwatch category declined 52% to 2.8 million units from 5.5 million in the year ago period, reported IDC recently.

“I’m bullish on the immediate and short-term prospects for fitness bands,” said Ramon Llamas, research manager for IDC’s wearable team. Llamas feel that fitness bands that do not bind to smartphones and sync with third-party apps will likely outperform smartwatches during the holiday shopping season.

Photo by mortsan