Pebble, the revolutionary smartwatch company that launched after a successful Kickstarter campaign, is laying off 25% of its total staff in a move that not only lays bare the troubles the company is facing, but the troubles in the entire smartwatch industry.
The news comes from an interview between Pebble CEO Eric Migicovsky and Tech Insider. Since completing its 2013 Kickstarter campaign, Pebble has branded itself as a startup that is owned by the general public, an ethos that saw the company launch another Kickstarter campaign in 2015 for its Pebble Time model.
The rumour that Pebble is not doing well hung above the company for sometime but the company has remained quiet about its finances. The only time that the company announced sales was in 2015, claiming that it had sold one million smartwatches since 2013.
In its 2015 Kickstarter campaign Pebble CEO revealed that it had raised US$20 million and a further raised US$26 million, a mix of debt and venture capital, over the last eight months.
Part of its reasons for laying off its staff is due to the Silicon Valley fundraising environment.
“We’ve definitely been careful this year as we plan our products,” said Migicovsky in the Tech Insider interview. “We got this money, but money [among VCs in Silicon Valley] is pretty tight these days.”
The news come after Apple reduced prices for its Apple Watch by US$50. Though Apple did not offer a reason for their drop in pricing, it could be that it is not selling well and hopes to entice more buyers. Both Apple’s price cut move and Pebble job cuts are indicating to a much bigger problem for smartphones. The smartwatch fad is dying. Smartwatches have thus far failed to wow the consumers, only being seen as nice-to-have gadgets and not a necessity.
Pebble CEO, amidst the sad times, is keeping his head up. In the interview he revealed that he wants Pebble to focus on the health and fitness aspects of the company’s wearables. According to him, this is what people are interested in.
Plans are also afoot for Pebble to sell in India next month after striking a partnership with Amazon. Pebble targets the lower end of the smartwatch market and its watches are compatible with both iOS and Android. Its Pebble Classic, its cheapest model, is US$100 and the Pebble Time Steel, its most expensive, retails at US$250.