Does Pebble Challenge Apple’s Hardware Game?

The tech community has been enamored of the Pebble Watch and its ability to raise more than $7 million on Kickstarter.

The device has racked up more than 50,000 supporters who will soon be wearing it on their wrists and connecting to their iPhones.

But with such success,  Pebble begs an important question, which John Batelle asks on his searchblog: why did Silicon Valley venture capitalists avoid funding it?

One of his theories is very interesting, especially as we look into the future of how Apple will handle its iOS ecosystem.

Batelle wrote that one reason VCs may have avoided investing in Pebble was because they were afraid of what Apple may do. The watch is essentially powered by the iPhone. It connects via Bluetooth to the iPhone and uses the capabilities of iOS and displays them on the Pebble screen.

Batelle put it in clearer terms:

“Pebble uses bluetooth connectivity to access the iPhone’s native capabilities, and then displays data, apps, and services on its high-resolution e-paper screen. It even has its own “app store” and (upcoming) SDK/API  so people can write native apps to the device.”

This is all well and good for the time being. But Apple makes the majority of its money from hardware sales, as we’ve noted here, and it may have a problem with allowing other companies to use its own software-hardware combination to power non-Apple devices–like Pebble does.

If Pebble’s inroads are successful, then there will be nothing to stop another company from using an iPhone to power, say, another smartphone, tablet, or laptop. And that could rub Apple the wrong way.

This is all speculation; Apple may look at the situation and say that devices such as Pebble add value to their ecosystem. A more valuable ecosystem drives more hardware purchases. On the other hand, Apple has kept its ecosystem loop closed for an important reason: it banks on hardware. When another company makes the hardware, as Pebble has done, that takes away an important revenue-driver from Apple.

The only thing to do is wait and see how Apple reacts to the Pebble watch. Does it make a competitor? Does it close off compatibility? Or does it view it as a boost to the overall Apple ecosystem?

 

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