[ MUSIC ] Welcome to Fortune tech debate where we debate the issues of the day in two minutes. Today we are talking about Fitbit's acquisition of Pebble. Alright, let's put two minutes on the clock. Take it away Okay. So, FitBit has acquired Pebble. Yeah. For pretty much next to nothing. They're basically acquiring the team and this tells us a couple things. For one, Pebble, the Smart Watch start up, the original one Yeah. Start- ups can't really do hardware It's a tough business! It's so expensive. It's so hard. Huge! And most of them fail, probably almost all of them, except for [ INAUDIBLE ] Not surprised. Number two The market for wearables is not as big as the trillion dollar expectation that analysts and hype cyclers like us. At the same time I do agree with you in principle, yes, because early days they were saying wearable apparel, we would all be wearing clothes with a electronics in them. That hasn't happened. Google glass, that hasn't happened. Spectacles, though, maybe. Yes, maybe. But at the same time We are seeing sales of these things. Apple says it's selling more watches than it even has before. And it certainly had the early mover advantage in that regard. Come on, these things are selling. Do you think that Apple is selling more watches and that is why FitBit stock is down? Or do you think that FitBit stock is down because The entire world and the investor market has realized wearables are just not. No, I think FitBit's stock is down because it doesn't have a good business model. I have a FitBit I put it down last week. I didnt want to wear it anymore. It was kind of a pain. I have to charge it all the time. I didn't want to Anecdotal evidence I realise but this is actually the problem for the company, if people aren't wearing the devices, they're not collecting data on that, they're not selling them either. It has a kind of stickiness problem. No I think that fit bit has realised that yes the actual hardware is not the most important thing, that what the future of their business is going to be, the data What is collected from that and the insight that you can glean from it. And the thing is once [ CROSSTALK ] as we build out the use cases for this. Like when doctors start saying I need this data on you. And they're other use cases that we could have. Sure. Where it's going to be required almost in order to get good care or ii >> Is Fitbit really? Positioned to be in that business I mean, does he have the data? Absolutely, but can he compete against Apple? Can he compete against Google? I think there is room for, Facebook. Maybe a couple of those. It's too small it needs to acquired and that's, [ INAUDIBLE ] Biggest problem Apple had decision not to change that. Okay. All right, for more come to fortune. com. [ MUSIC ] [ BLANK_AUDIO ]

FitBit’s Acquisition of Pebble Probably Won’t Move the Needle