A couple of months after it confirmed that it acquired the intellectual propety rights of Pebble, Fitbit has revealed just how much it paid for the privelege – the bargain price of $23 million (£19 million).
It had previously been reported that Pebble had been sold for between $34 million and $40 million (£27 million and £32 million), but this first official confirmation from the company is significantly less than what was previously believed. This may come from the fact that Fitbit only acquired the smartwatch maker’s intellectual property rights rather than its product portfolio or branding.
Fitbit however is not having the greatest time right now. The company reported a steep drop in Christmas sales – down to 6.5 million from 8.2 million the year before – with reveunues for the fourth quarter of the year were $573.8 million (£461 million), down 19 per cent year-on-year. For the entire year though, sales hit $2.17 billion (£1.74 billion), up 17 per cent.
While the overall increase may seem positive, rebates and price reductions, acquisition costs, increased staff expenditure, an inventory write-off, and equipment costs all led to the fitness tracker maker reporting a $146m (£118m) loss on the final quarter of 2016, and a $103 million (£82 million) loss on the full year. Compared with 2015 which saw a third quarter profit of $64 million (£52 million) and $176 million (£141 million) profit for the entire year makes for less than great reading for Fitbit investors.
The company has said that it expects losses to continue into the coming quarter and year, where it projects annual revenue will fall somewhere between $1.5bn and $1.7bn (£1.2bn and £1.4bn). It will hope that the Pebble acquisition will help to improve its long term fortunes.