Dive Brief:

• According to anonymous sources Fitbit is set to acquire Pebble, as reported by The Wall Street Journal.
• The sources report that Fitbit is interested in Pebble’s employees, intellectual property and operating system and will shut the brand down after the acquisition.
• The talks are in advanced negotiations and while Fitbit has undergone a dramatic slowdown in sales this year, Pebble is in rough financial shape and running out of funding.

Dive Insight:

Pebble is fifth in the smartwatch marketplace with only a 3.2% share and lagging far behind Apple, Garmin, Samsung and Lenovo, but the startup was a pioneer in the space. Overall, wearables, including smartwatches, are down and the International Data Corporation’s Worldwide Quarterly Wearable Device Tracker for Q3 found a 51.6% drop in smartwatch shipment volume over 2015. The drop is being driven by players pushing shipments of new smartwatch versions and Google postponing its latest smartwatch.

The overall takeaway for marketers is it might be time to reconsider putting time and money into reaching consumers on wearables until the marketplace stabilizes. Google, for one, hopes to simply marketing opportunities on Android Wear devices with an easier path to app discovery next year, something it claims marketers are asking for. 

Pebble’s Kickstarter supporters are “in an uproar” as reported by Gizmodo. According to Gizmodo, the sale price will be a tenth of what Citizen offered the smartwatch startup last year. Pebble currently has several Kickstarter campaigns that have either shipped limited products, or none at all for one campaign started in June.