Pebble was one of the first companies to create a viable smartwatch for the masses, but now the company is having to downsize amid growing competition in the sector. The company is laying off 40 employees, which represents 25 percent of its workforce.
"We've definitely been careful this year as we plan our products," said Pebble CEO Eric Migicovsky. "We got this money, but [Silicon Valley VC funding] is pretty tight these days."
Nearly a year ago, the company was riding high with the announcement that it had raised $20 million at the end of its Time Kickstarter campaign thanks in part to nearly 79,000 backers that were willing to purchase Pebble’s first color smartwatch. But that was before Apple launched the Apple Watch and a second generation of Android Wear devices started hitting the market. In more recent months, Samsung has even turned a few heads with its Tizen-powered and attractive Gear S2 smartwatches.
But even big name players are finding it hard to find a stable base for smartwatches. After retailers chopped as much as $100 off the price of the Apple Watch and Apple Watch Sport during the holiday shopping season, Apple this week permanently lowered the starting price of the Apple Watch Sport from $349 to $299 — this is a pretty rare move for Apple for a device that hasn’t been on the market for even a whole year.
"We want to be careful," added Migicovsky. "Pebble is in this for the long haul. We have a vision where wearables will take us in five to 10 years, and this is setting us up for success."
It remains to be seen if smartwatches will eventually catch on with the masses. Most of us already own smartphones, and a smartwatch is a needless accessory to many people. Why buy a smartwatch when your smartphone can often do more (and often more quickly in the case of using an Apple Watch versus using an iPhone)? Who knows, smartwatches could end up being today’s 3D TVs unless there’s a serious “killer app” that comes along to justify the purchase price (in addition to the cost of the smartphone that you need to pair with it).