Fitbit Styles Up Luxury Expertise With Euro Smartwatch Maker Purchase
Fitbit CEO James Park has collected quite the assemblage of wearable technology assets. On Tuesday, Park snapped up expertise and software from European smartwatch maker Vector Watch.
Per his earlier deals for assets of defunct smartwatch pioneer Pebble and mobile wallet Coin, the deal did not include Vector’s current line of luxury devices. Nor Fitbit did not disclose the purchase price.
Fitbit remains the leading seller of wearables, but sales growth of the company’s line of fitness activity trackers stalled at the end of last year. Fitbit is now moving up market, with new products coming later this year that will incorporate more smartwatch-like features. That could help get sales back on track and boost Fitbit’s share price, which lost 75% of its value in 2016.
But initial news of the Vector deal did not help as Fitbit shares lost 5% in midday trading on Tuesday.
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Vector makes a line of high-end smartwatches that resemble expensive and modern traditional watches. The company’s Vector Luna watch comes in rose gold with a black crocodile strap for 500 euros, or about $530. Fitbit won’t sell the Vector watches, but will maintain the watchmaker’s office in Bucharest, Romania.
“As with our recently announced acquisition of Pebble assets, Vector brings valuable industry expertise that will help accelerate the development of new products, features and functionality,” Fitbit said in a statement. “With the addition of the Vector Watch team, we are establishing a cutting-edge development center in Bucharest, Romania, further building our global engineering capabilities and expanding our presence in EMEA.”
Vector said its smartwatches—on sale since 2015—would continue to function, but no new functions would be added. Existing models and accessories will remain for sale at partner retailers, but no new models will developed either. Warranties and customer support will continue through the company’s web site.
“We believe this is an important milestone as a moment when we will start building other new and amazing products, features and experiences, incorporating our unique technology and knowhow with Fitbit’s experience and global community,” Vector said in a statement posted on its web site.
The Vector acquisition could help Fitbit (FIT) better compete with Apple (AAPL), which has emphasized luxury ties to Hermes and Coach (COH) in some models of its watch and accessory bands. Apple has been focusing on adding more Fitbit-like fitness features to its watches, even as Fitbit has been looking to add more smartwatch functionality to its bands.
At CES in Las Vegas last week, Fitbit eschewed any new product announcements, instead focusing on software and service improvements.