Pebble skips 25% of workers -- signs of smartwatch bubble bursting?

Pebble CEO Eric Migicovsky blames silly-valley VCs for not giving him all the money he needs. But when even Apple can't give them away, what future for the smartwatch market?

Pebble is letting 40 people go -- that's 25% of its workforce -- because money. It illustrates the parlous state of the smartwatch market, where not even Apple or Samsung can shift the things.

Only a few years ago, Pebble Technology Corporation was the darling of the crowdfunding crowd, having raised over $30 million on Kickstarter. But now the company finds it tough to keep the plates spinning.

Pebble CEO Eric Migicovsky (pictured) confirmed the layoffs. He implied that VCs are now less keen on funding the smartwatch category.

In IT Blogwatch, bloggers wonder if it's time to call time on wrist-computers. Not to mention: Eye of the Smalltown Sorry

Your humble blogwatcher curated these bloggy bits for your entertainment. [Updated 7:07 am PT to correct a math error, which was introduced by others but stupidly not verified by your humble blogwatcher.]

What’s the craic? Steve Kovach gets inside the story—Pebble is laying off 25% of its staff:

One of the first companies to launch a modern smartwatch is laying off 40 employees. ... CEO Eric Migicovsky...blamed a chilly fundraising environment.

The Pebble layoffs come at a shaky time for the wearable technology market. ... Apple dropped the price of the Apple Watch by $50...a sign that it's not selling as well as hoped. ... Estimates for Apple Watch sales are all over the place.

Smartwatches were once considered to be the "next big thing." ... They're nice to own, but still not as...essential as a smartphone.

Jake Smith fffades away. He asks, are Wearables in flux?:

The shakiness at Pebble comes at an interesting time in the wearables industry. ... Jawbone has seen its stock falling as industry pundits sound the alarm.

IDC [sees] wearable devices reaching 110 million by the end of 2016...38.2 percent growth. [So] are the smaller, cash-strapped companies a good buyout option for the big wearable makers? ... Last year, Misfit was acquired by Fossil Group for $260 million.

How did we get here? Ian Hardy reminds us:

Pebble was the first company to successfully raise $10 million on 2012. [It] initially hoped to raise $100,000, but...its watch instantly hit a chord with early adopters. [It] came back to Kickstarter with the Pebble Time, and managed to raise...$20,338,986 [from] 78,471 backers.

Its founder, Eric Migicovsky...was born in Vancouver [and] graduated from the University of Waterloo. [He] first founded Allerta, which created a watch for Blackberry devices. ... Pebble is currently based in Silicon Valley.

Pebble has been shaking the money tree, certainly. Jon Russell leaves this here: [You're fired -Ed.]

Last year, we reported the company was in some trouble and had turned to debt funding and loans. [Migicovsky] blamed a more cautious outlook from VCs...for letting [the] employees go. “We’ve definitely been careful this year. ... Money is pretty tight these days.”

Fitbit was initially championed as an industry leader...but its stock has been battered in 2016. ... Smartwatches haven’t set the market alight. ... Pebble is rivaled by Apple, Samsung, Motorola, LG and others. ... And, crucially for Pebble, it doesn’t have a smartphone unit or other businesses to fall back on.

The shakeout continues. Valentina Palladino says Pebble wants to "be careful" with its money:

As more and more companies develop smartwatches, we're starting to see...which will fall behind. ... Migicovsky was slightly cryptic when explaining the reason for the layoffs. [But he] claims Pebble will focus its wearable device efforts on the health and fitness market.

Pebble's success has always been heavily based on its community. ... But now it appears even a strong community cannot prevent [industry] shakiness...affecting Pebble.

Yep, it's as if thousands of Pebble users suddenly cried out in terror. But Matthew David will not be silenced:

Not a good sign. ... I love my pebble: It is cheap, durable, long lasting, and does just about everything I could ask of it.

Clearly bigger market competition is winning. Much harder to compete with the big wigs when you're working in hardware [than in] software.

And Finally…

Eye of the Smalltown Sorry
[Justin Bieber vs. Survivor vs. BronskiBeat vs. DJs From Mars]

You have been reading IT Blogwatch by Richi Jennings, who curates the best bloggy bits, finest forums, and weirdest websites… so you don’t have to. Catch the key commentary from around the Web every morning. Hatemail may be directed to @RiCHi or
Opinions expressed may not represent those of Computerworld. Ask your doctor before reading. Your mileage may vary. E&OE.

Copyright © 2016 IDG Communications, Inc.

Shop Tech Products at Amazon