The smartwatch is a growing market, and a new one at that (even after the introduction of the Samsung Galaxy Gear in 2013), but some companies are thriving in the field while others are surviving. Sometimes, what is projected about companies is simply an attempt to hide the more uglier parts of the company's performance. In the case of Pebble, it seems that this is true. The company is now laying off 25% (40 employees) of its workforce due to tight funds.
In an interview with Pebble CEO Eric Migicovsky, the CEO admitted that financial reasons are the motivation behind the layoff: "Money is pretty tight these days," spelling out in uncertain terms that when money is hard to find, layoffs are pretty standard in the tech business.
Pebble has tried to establish itself as an alternative to other smartwatch makers out there such as giants Apple, Samsung, Motorola, and other Android Wear partners (including Asus, Sony, TAG Heuer, and soon, Casio), with its own app store and new Pebble Health update for its own smartwatches. The company has gone so far as to create a color LCD display in its first-generation Pebble Time due to the very soft popularity of its original Pebble and Pebble Steel smartwatches. Circular smartwatches have become a growing preference for interested buyers, leading Pebble to create the Pebble Round, the company's own circular smartwatch for the more circular-oriented crowd.
And yet, the company's financial problems stem not from its fundraising efforts ($26 million in the last eight months), but from sales. Pebble just can't sell smartwatches. It's easy to see why because a number of consumers own Android smartphones. When it comes to Android devices, Google has established Android Wear as a more watered-down Android platform for its smartwatches, and, with Google's app selection at the Play Store, many find it hard to go with Pebble when they want the same app selection they have on their current Android device(s).
To be brief and cut to the chase, Pebble is not a smartphone maker, and that is what's killing the company's sales. Cross-platform devices are good, but the major manufacturers are starting to catch on with this idea. Samsung, for instance, is bringing iOS compatibility to the Gear S2 sometime later this month, with Samsung having opened up the Gear S2 to non-Samsung smartphones when the Korean giant unveiled it. This, however, doesn't mean good news for a company such as Pebble that's set itself apart only by cross-platform compatibility.
What do you do when you've been cross-platform for so long and companies like Samsung start to catch up and adopt this mindset? In a word, you get left out of the party. With the Internet of Things (IoT) becoming a rising trend in mobile, Pebble will only remain relevant for so long. Why go to Pebble when you can go to Samsung or Apple for not only your devices, but also their interconnectedness? Additionally, Pebble's designs aren't really that awe-inspiring, which makes it hard for the company to rise above its current state. And, Pebble is one to price its devices right up there with the best of retail pricing on these mobile devices -- which serves to frustrate the company's plans. When you place a Pebble Time Round beside a Gear S2 or Apple Watch, which watch do you think customers will choose? There's a strong possibility that the Apple or Samsung smartwatch will turn customers away from the Pebble watch.
The interview is an honest one, and we're glad to see the CEO come clean. After all, few companies are this transparent nowadays. At the same time, however, it shows that not all is well with Pebble's finances. We have a feeling that Pebble is not the only one feeling the effects of the Apple-Samsung duopoly in the smartwatch market. We hope that Casio fares better in this space when its WSD-F10 smartwatch launches this Friday.