Fitbit has acquired London-based smartwatch vendor Vector Watch for an undisclosed sum, continuing a spending spree that has seen the struggling wearables market consolidate in recent months.
Vector was founded in 2015 and raised a little more than $12 million through three fundraising rounds, according to Crunchbase. Vector was a relatively small player, but had garnered attention by achieving a 30-day battery life despite an always-on screen.
“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 blog post on its website. “Our smartwatches will maintain functionalities and features. You will continue to enjoy the Vector Watch experience: A 30-day battery life smartwatch, with customizable watch-faces and dedicated streams. However, new product features (software and hardware) will not be added.”
Fitbit’s fitness bands have come to dominate a wearables market where more sophisticated devices have failed to gain much traction. Fitness bands saw double-digit growth in the third quarter of 2016 and accounted for 85% of wearables sales during the period, according to IDC. Fitbit led all vendors with a 23% market share, followed in order by Xiaomi and Garmin.
Fitbit acquired the smartwatch pioneer Pebble last month for less than $40 million, according to a Bloomberg report, although Pebble’s debt and other obligations exceed that sum. And the Vector pick-up is the latest indication that Fitbit hopes to build on its success by producing wearables that with more sophisticated features and functionality than simple fitness trackers.
But it isn’t clear how much demand exists for such devices. Apple generated a significant amount of buzz with its Apple Watch, but shipments plummeted 71% year-over-year in the third quarter, IDC estimated, and the company claimed a mere 4.9% of the wearables market. And IDC said global smartwatch shipments sank 52% in the third quarter due to a lack of new devices and platforms.
“Without a clear use case for smartwatches—which have more features than fitness trackers, but significant overlap with smartphone functionality—the more sophisticated, expensive devices have not caught on as quickly as expected,” eMarketer analyst Cathy Boyle wrote on the company’s site last month.